Correlation Between Marine Products and Evil Empire

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

By analyzing existing cross correlation between Marine Products and Evil Empire Designs, you can compare the effects of market volatilities on Marine Products and Evil Empire 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 Evil Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Evil Empire.

Diversification Opportunities for Marine Products and Evil Empire

0.73

Correlation Coefficient

Marine Products  Evil Empire

Poor diversification

The 3 months correlation between Marine and Evil is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Evil Empire Designs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evil Empire Designs 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 Evil Empire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evil Empire Designs has no effect on the direction of Marine Products i.e., Marine Products and Evil Empire go up and down completely randomly.

Pair Corralation between Marine Products and Evil Empire

Considering the 90-day investment horizon Marine Products is expected to generate 0.39 times more return on investment than Evil Empire. However, Marine Products is 2.56 times less risky than Evil Empire. It trades about -0.08 of its potential returns per unit of risk. Evil Empire Designs is currently generating about -0.13 per unit of risk. If you would invest  941.00  in Marine Products on December 5, 2024 and sell it today you would lose (95.00) from holding Marine Products or give up 10.1% of portfolio value over 90 days.

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

Marine Products  vs.  Evil Empire Designs

Marine Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marine Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Evil Empire Designs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evil Empire Designs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Marine Products and Evil Empire

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

The idea behind Marine Products and Evil Empire Designs 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.