Correlation Between Impact Fusion and Marchex

Can any of the company-specific risk be diversified away by investing in both Impact Fusion and Marchex 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 Impact Fusion and Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Impact Fusion International and Marchex, you can compare the effects of market volatilities on Impact Fusion and Marchex 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 Impact Fusion with a short position of Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impact Fusion and Marchex.

Diversification Opportunities for Impact Fusion and Marchex

-0.63

Correlation Coefficient

Impact Fusion  Marchex

Excellent diversification

The 3 months correlation between Impact and Marchex is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Impact Fusion International and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex and Impact Fusion 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 Impact Fusion International are associated (or correlated) with Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Impact Fusion i.e., Impact Fusion and Marchex go up and down completely randomly.

Pair Corralation between Impact Fusion and Marchex

Given the investment horizon of 90 days Impact Fusion International is expected to under-perform the Marchex. In addition to that, Impact Fusion is 1.86 times more volatile than Marchex. It trades about -0.26 of its total potential returns per unit of risk. Marchex is currently generating about -0.04 per unit of volatility. If you would invest  198.00  in Marchex on October 20, 2024 and sell it today you would lose (6.00) from holding Marchex or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Impact Fusion International  vs.  Marchex

Impact Fusion Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Fusion International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Marchex

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marchex are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Marchex may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Impact Fusion and Marchex

The main advantage of trading using opposite Impact Fusion and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impact Fusion position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex's long position.

The idea behind Impact Fusion International and Marchex 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.