Correlation Between Marcus and Gaia

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

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

Diversification Opportunities for Marcus and Gaia

0.57

Correlation Coefficient

Marcus  Gaia

Very weak diversification

The 3 months correlation between Marcus and Gaia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Gaia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaia Inc and Marcus 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 Marcus are associated (or correlated) with Gaia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaia Inc has no effect on the direction of Marcus i.e., Marcus and Gaia go up and down completely randomly.

Pair Corralation between Marcus and Gaia

Considering the 90-day investment horizon Marcus is expected to under-perform the Gaia. But the stock apears to be less risky and, when comparing its historical volatility, Marcus is 1.56 times less risky than Gaia. The stock trades about -0.13 of its potential returns per unit of risk. The Gaia Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  444.00  in Gaia Inc on December 28, 2024 and sell it today you would lose (44.00) from holding Gaia Inc or give up 9.91% of portfolio value over 90 days.

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

Marcus  vs.  Gaia Inc

Marcus

Risk-Adjusted Performance

Very Weak

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

Gaia Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gaia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Marcus and Gaia

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

The idea behind Marcus and Gaia Inc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.