Correlation Between Marine Products and 05329RAA1

Can any of the company-specific risk be diversified away by investing in both Marine Products and 05329RAA1 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 05329RAA1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marine Products and AN 385 01 MAR 32, you can compare the effects of market volatilities on Marine Products and 05329RAA1 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 05329RAA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and 05329RAA1.

Diversification Opportunities for Marine Products and 05329RAA1

-0.36

Correlation Coefficient

Marine Products  05329RAA1

Very good diversification

The 3 months correlation between Marine and 05329RAA1 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and AN 385 01 MAR 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AN 385 01 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 05329RAA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AN 385 01 has no effect on the direction of Marine Products i.e., Marine Products and 05329RAA1 go up and down completely randomly.

Pair Corralation between Marine Products and 05329RAA1

Considering the 90-day investment horizon Marine Products is expected to under-perform the 05329RAA1. In addition to that, Marine Products is 4.62 times more volatile than AN 385 01 MAR 32. It trades about -0.06 of its total potential returns per unit of risk. AN 385 01 MAR 32 is currently generating about 0.08 per unit of volatility. If you would invest  8,952  in AN 385 01 MAR 32 on December 24, 2024 and sell it today you would earn a total of  191.00  from holding AN 385 01 MAR 32 or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Marine Products  vs.  AN 385 01 MAR 32

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.

AN 385 01

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AN 385 01 MAR 32 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 05329RAA1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marine Products and 05329RAA1

The main advantage of trading using opposite Marine Products and 05329RAA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, 05329RAA1 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 05329RAA1 will offset losses from the drop in 05329RAA1's long position.

The idea behind Marine Products and AN 385 01 MAR 32 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.