Correlation Between Marine Products and Binah Capital

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

By analyzing existing cross correlation between Marine Products and Binah Capital Group,, you can compare the effects of market volatilities on Marine Products and Binah Capital 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 Marine Products with a short position of Binah Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Binah Capital.

Diversification Opportunities for Marine Products and Binah Capital

0.28

Correlation Coefficient

Marine Products  Binah Capital

Modest diversification

The 3 months correlation between Marine and Binah is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, and Marine Products 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 Marine Products are associated (or correlated) with Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of Marine Products i.e., Marine Products and Binah Capital go up and down completely randomly.

Pair Corralation between Marine Products and Binah Capital

Considering the 90-day investment horizon Marine Products is expected to generate 15.76 times less return on investment than Binah Capital. But when comparing it to its historical volatility, Marine Products is 6.73 times less risky than Binah Capital. It trades about 0.01 of its potential returns per unit of risk. Binah Capital Group, is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  284.00  in Binah Capital Group, on September 18, 2024 and sell it today you would lose (19.00) from holding Binah Capital Group, or give up 6.69% of portfolio value over 90 days.

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

Marine Products  vs.  Binah Capital Group,

Marine Products

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marine Products are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Marine Products is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Binah Capital Group,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Binah Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marine Products and Binah Capital

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

The idea behind Marine Products and Binah Capital Group, 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.