Correlation Between Marcus Millichap and CKX Lands

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

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

Diversification Opportunities for Marcus Millichap and CKX Lands

-0.65

Correlation Coefficient

Marcus Millichap  CKX Lands

Excellent diversification

The 3 months correlation between Marcus and CKX is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and CKX Lands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKX Lands 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 CKX Lands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKX Lands has no effect on the direction of Marcus Millichap i.e., Marcus Millichap and CKX Lands go up and down completely randomly.

Pair Corralation between Marcus Millichap and CKX Lands

Considering the 90-day investment horizon Marcus Millichap is expected to generate 0.92 times more return on investment than CKX Lands. However, Marcus Millichap is 1.09 times less risky than CKX Lands. It trades about 0.06 of its potential returns per unit of risk. CKX Lands is currently generating about -0.06 per unit of risk. If you would invest  3,942  in Marcus Millichap on August 30, 2024 and sell it today you would earn a total of  249.00  from holding Marcus Millichap or generate 6.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	84.13%
Values	Daily Returns

Marcus Millichap  vs.  CKX Lands

Marcus Millichap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus Millichap are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, Marcus Millichap may actually be approaching a critical reversion point that can send shares even higher in December 2024.

CKX Lands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CKX Lands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking signals 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 Millichap and CKX Lands

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

The idea behind Marcus Millichap and CKX Lands 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.