Correlation Between Marcus Millichap and Alset Ehome

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

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

Diversification Opportunities for Marcus Millichap and Alset Ehome

0.33

Correlation Coefficient

Marcus Millichap  Alset Ehome

Weak diversification

The 3 months correlation between Marcus and Alset is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and Alset Ehome International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alset Ehome International and Marcus Millichap 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 Millichap are associated (or correlated) with Alset Ehome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alset Ehome International has no effect on the direction of Marcus Millichap i.e., Marcus Millichap and Alset Ehome go up and down completely randomly.

Pair Corralation between Marcus Millichap and Alset Ehome

Considering the 90-day investment horizon Marcus Millichap is expected to under-perform the Alset Ehome. But the stock apears to be less risky and, when comparing its historical volatility, Marcus Millichap is 4.99 times less risky than Alset Ehome. The stock trades about -0.04 of its potential returns per unit of risk. The Alset Ehome International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  84.00  in Alset Ehome International on December 27, 2024 and sell it today you would earn a total of  9.00  from holding Alset Ehome International or generate 10.71% return on investment over 90 days.

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

Marcus Millichap  vs.  Alset Ehome International

Marcus Millichap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus Millichap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Marcus Millichap is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Alset Ehome International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alset Ehome International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Alset Ehome demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marcus Millichap and Alset Ehome

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

The idea behind Marcus Millichap and Alset Ehome International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.