Correlation Between Marcus and Kuke Music

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

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

Diversification Opportunities for Marcus and Kuke Music

0.71

Correlation Coefficient

Marcus  Kuke Music

Poor diversification

The 3 months correlation between Marcus and Kuke is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Kuke Music Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuke Music Holding 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 Kuke Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuke Music Holding has no effect on the direction of Marcus i.e., Marcus and Kuke Music go up and down completely randomly.

Pair Corralation between Marcus and Kuke Music

Considering the 90-day investment horizon Marcus is expected to under-perform the Kuke Music. But the stock apears to be less risky and, when comparing its historical volatility, Marcus is 4.93 times less risky than Kuke Music. The stock trades about -0.14 of its potential returns per unit of risk. The Kuke Music Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  350.00  in Kuke Music Holding on December 27, 2024 and sell it today you would lose (46.50) from holding Kuke Music Holding or give up 13.29% of portfolio value over 90 days.

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

Marcus  vs.  Kuke Music Holding

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.

Kuke Music Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kuke Music Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, Kuke Music exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marcus and Kuke Music

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

The idea behind Marcus and Kuke Music Holding 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..