Correlation Between Issuer Direct and Marin Software

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

By analyzing existing cross correlation between Issuer Direct Corp and Marin Software, you can compare the effects of market volatilities on Issuer Direct and Marin Software 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 Issuer Direct with a short position of Marin Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Issuer Direct and Marin Software.

Diversification Opportunities for Issuer Direct and Marin Software

0.64

Correlation Coefficient

Issuer Direct  Marin Software

Poor diversification

The 3 months correlation between Issuer and Marin is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Issuer Direct Corp and Marin Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marin Software and Issuer Direct 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 Issuer Direct Corp are associated (or correlated) with Marin Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marin Software has no effect on the direction of Issuer Direct i.e., Issuer Direct and Marin Software go up and down completely randomly.

Pair Corralation between Issuer Direct and Marin Software

Given the investment horizon of 90 days Issuer Direct Corp is expected to generate 1.15 times more return on investment than Marin Software. However, Issuer Direct is 1.15 times more volatile than Marin Software. It trades about -0.05 of its potential returns per unit of risk. Marin Software is currently generating about -0.06 per unit of risk. If you would invest  1,118  in Issuer Direct Corp on September 5, 2024 and sell it today you would lose (138.00) from holding Issuer Direct Corp or give up 12.34% of portfolio value over 90 days.

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

Issuer Direct Corp  vs.  Marin Software

Issuer Direct Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Issuer Direct Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Marin Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marin Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Issuer Direct and Marin Software

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

The idea behind Issuer Direct Corp and Marin Software 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.