Correlation Between Marchex and Baosheng Media

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

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

Diversification Opportunities for Marchex and Baosheng Media

-0.15

Correlation Coefficient

Marchex  Baosheng Media

Good diversification

The 3 months correlation between Marchex and Baosheng is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Baosheng Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baosheng Media Group and Marchex 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 Marchex are associated (or correlated) with Baosheng Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baosheng Media Group has no effect on the direction of Marchex i.e., Marchex and Baosheng Media go up and down completely randomly.

Pair Corralation between Marchex and Baosheng Media

Given the investment horizon of 90 days Marchex is expected to generate 0.65 times more return on investment than Baosheng Media. However, Marchex is 1.54 times less risky than Baosheng Media. It trades about 0.09 of its potential returns per unit of risk. Baosheng Media Group is currently generating about -0.05 per unit of risk. If you would invest  174.00  in Marchex on September 17, 2024 and sell it today you would earn a total of  33.00  from holding Marchex or generate 18.97% return on investment over 90 days.

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

Marchex  vs.  Baosheng Media Group

Marchex

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marchex are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Marchex showed solid returns over the last few months and may actually be approaching a breakup point.

Baosheng Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Marchex and Baosheng Media

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

The idea behind Marchex and Baosheng Media Group 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.