Correlation Between Marchex and Beyond Commerce

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

By analyzing existing cross correlation between Marchex and Beyond Commerce, you can compare the effects of market volatilities on Marchex and Beyond Commerce 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 Beyond Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Beyond Commerce.

Diversification Opportunities for Marchex and Beyond Commerce

0.17

Correlation Coefficient

Marchex  Beyond Commerce

Average diversification

The 3 months correlation between Marchex and Beyond is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Beyond Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Commerce 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 Beyond Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Commerce has no effect on the direction of Marchex i.e., Marchex and Beyond Commerce go up and down completely randomly.

Pair Corralation between Marchex and Beyond Commerce

Given the investment horizon of 90 days Marchex is expected to under-perform the Beyond Commerce. But the stock apears to be less risky and, when comparing its historical volatility, Marchex is 13.51 times less risky than Beyond Commerce. The stock trades about -0.03 of its potential returns per unit of risk. The Beyond Commerce is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Beyond Commerce on December 29, 2024 and sell it today you would lose (0.01) from holding Beyond Commerce or give up 50.0% of portfolio value over 90 days.

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

Marchex  vs.  Beyond Commerce

Marchex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marchex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Marchex is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Beyond Commerce

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Commerce are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Beyond Commerce exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marchex and Beyond Commerce

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

The idea behind Marchex and Beyond Commerce 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 Commodity Directory module to find actively traded commodities issued by global exchanges.