Correlation Between Marks and INTERNET INJPADR

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

By analyzing existing cross correlation between Marks and Spencer and INTERNET INJPADR 1, you can compare the effects of market volatilities on Marks and INTERNET INJPADR 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 Marks with a short position of INTERNET INJPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marks and INTERNET INJPADR.

Diversification Opportunities for Marks and INTERNET INJPADR

0.58

Correlation Coefficient

Marks  INTERNET INJPADR

Very weak diversification

The 3 months correlation between Marks and INTERNET is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Marks and Spencer and INTERNET INJPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNET INJPADR 1 and Marks 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 Marks and Spencer are associated (or correlated) with INTERNET INJPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNET INJPADR 1 has no effect on the direction of Marks i.e., Marks and INTERNET INJPADR go up and down completely randomly.

Pair Corralation between Marks and INTERNET INJPADR

Assuming the 90 days horizon Marks and Spencer is expected to under-perform the INTERNET INJPADR. In addition to that, Marks is 1.72 times more volatile than INTERNET INJPADR 1. It trades about -0.22 of its total potential returns per unit of risk. INTERNET INJPADR 1 is currently generating about -0.01 per unit of volatility. If you would invest  3,400  in INTERNET INJPADR 1 on October 27, 2024 and sell it today you would lose (20.00) from holding INTERNET INJPADR 1 or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Marks and Spencer  vs.  INTERNET INJPADR 1

Marks and Spencer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marks and Spencer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

INTERNET INJPADR 1

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTERNET INJPADR 1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, INTERNET INJPADR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Marks and INTERNET INJPADR

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

The idea behind Marks and Spencer and INTERNET INJPADR 1 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.