Correlation Between Marcus Millichap and Seritage Growth

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

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

Diversification Opportunities for Marcus Millichap and Seritage Growth

-0.13

Correlation Coefficient

Marcus Millichap  Seritage Growth

Good diversification

The 3 months correlation between Marcus and Seritage is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and Seritage Growth Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seritage Growth Prop 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 Seritage Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seritage Growth Prop has no effect on the direction of Marcus Millichap i.e., Marcus Millichap and Seritage Growth go up and down completely randomly.

Pair Corralation between Marcus Millichap and Seritage Growth

Considering the 90-day investment horizon Marcus Millichap is expected to generate 0.69 times more return on investment than Seritage Growth. However, Marcus Millichap is 1.44 times less risky than Seritage Growth. It trades about 0.03 of its potential returns per unit of risk. Seritage Growth Properties is currently generating about -0.06 per unit of risk. If you would invest  3,433  in Marcus Millichap on September 2, 2024 and sell it today you would earn a total of  728.00  from holding Marcus Millichap or generate 21.21% return on investment over 90 days.

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

Marcus Millichap  vs.  Seritage Growth Properties

Marcus Millichap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus Millichap are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, Marcus Millichap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Seritage Growth Prop

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Seritage Growth Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Seritage Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Marcus Millichap and Seritage Growth

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

The idea behind Marcus Millichap and Seritage Growth Properties 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.