Correlation Between Marygold Companies and Altisource Asset

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

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

Diversification Opportunities for Marygold Companies and Altisource Asset

-0.5

Correlation Coefficient

Marygold Companies  Altisource Asset

Very good diversification

The 3 months correlation between Marygold and Altisource is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Marygold Companies and Altisource Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altisource Asset Man and Marygold Companies 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 Marygold Companies are associated (or correlated) with Altisource Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altisource Asset Man has no effect on the direction of Marygold Companies i.e., Marygold Companies and Altisource Asset go up and down completely randomly.

Pair Corralation between Marygold Companies and Altisource Asset

Given the investment horizon of 90 days Marygold Companies is expected to generate 0.61 times more return on investment than Altisource Asset. However, Marygold Companies is 1.64 times less risky than Altisource Asset. It trades about 0.08 of its potential returns per unit of risk. Altisource Asset Management is currently generating about -0.09 per unit of risk. If you would invest  113.00  in Marygold Companies on October 22, 2024 and sell it today you would earn a total of  58.00  from holding Marygold Companies or generate 51.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	32.0%
Values	Daily Returns

Marygold Companies  vs.  Altisource Asset Management

Marygold Companies

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marygold Companies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent essential indicators, Marygold Companies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Altisource Asset Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altisource Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Altisource Asset is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Marygold Companies and Altisource Asset

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

The idea behind Marygold Companies and Altisource Asset Management 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.