Correlation Between Marcus and LiveOne

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

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

Diversification Opportunities for Marcus and LiveOne

0.73

Correlation Coefficient

Marcus  LiveOne

Poor diversification

The 3 months correlation between Marcus and LiveOne is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and LiveOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveOne 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 LiveOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveOne has no effect on the direction of Marcus i.e., Marcus and LiveOne go up and down completely randomly.

Pair Corralation between Marcus and LiveOne

Considering the 90-day investment horizon Marcus is expected to generate 0.36 times more return on investment than LiveOne. However, Marcus is 2.81 times less risky than LiveOne. It trades about -0.16 of its potential returns per unit of risk. LiveOne is currently generating about -0.13 per unit of risk. If you would invest  2,114  in Marcus on December 29, 2024 and sell it today you would lose (456.00) from holding Marcus or give up 21.57% of portfolio value over 90 days.

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

Marcus  vs.  LiveOne

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.

LiveOne

Risk-Adjusted Performance

Very Weak

Over the last 90 days LiveOne 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 basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Marcus and LiveOne

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

The idea behind Marcus and LiveOne 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.