Correlation Between Integral and MARRIOTT

Can any of the company-specific risk be diversified away by investing in both Integral and MARRIOTT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Integral and MARRIOTT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integral Ad Science and MARRIOTT INTL INC, you can compare the effects of market volatilities on Integral and MARRIOTT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Integral with a short position of MARRIOTT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and MARRIOTT.

Diversification Opportunities for Integral and MARRIOTT

0.31

Correlation Coefficient

Integral  MARRIOTT

Weak diversification

The 3 months correlation between Integral and MARRIOTT is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and MARRIOTT INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTL INC and Integral is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Integral Ad Science are associated (or correlated) with MARRIOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARRIOTT INTL INC has no effect on the direction of Integral i.e., Integral and MARRIOTT go up and down completely randomly.

Pair Corralation between Integral and MARRIOTT

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the MARRIOTT. In addition to that, Integral is 3.5 times more volatile than MARRIOTT INTL INC. It trades about -0.14 of its total potential returns per unit of risk. MARRIOTT INTL INC is currently generating about -0.12 per unit of volatility. If you would invest  9,917  in MARRIOTT INTL INC on October 15, 2024 and sell it today you would lose (160.00) from holding MARRIOTT INTL INC or give up 1.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Integral Ad Science  vs.  MARRIOTT INTL INC

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

MARRIOTT INTL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARRIOTT INTL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARRIOTT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Integral and MARRIOTT

The main advantage of trading using opposite Integral and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral position performs unexpectedly, MARRIOTT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MARRIOTT will offset losses from the drop in MARRIOTT's long position.

The idea behind Integral Ad Science and MARRIOTT INTL INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.