Correlation Between Marin Software and Aware

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

By analyzing existing cross correlation between Marin Software and Aware Inc, you can compare the effects of market volatilities on Marin Software and Aware 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 Marin Software with a short position of Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marin Software and Aware.

Diversification Opportunities for Marin Software and Aware

0.51

Correlation Coefficient

Marin Software  Aware

Very weak diversification

The 3 months correlation between Marin and Aware is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Marin Software and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and Marin Software 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 Marin Software are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Marin Software i.e., Marin Software and Aware go up and down completely randomly.

Pair Corralation between Marin Software and Aware

Given the investment horizon of 90 days Marin Software is expected to under-perform the Aware. In addition to that, Marin Software is 1.84 times more volatile than Aware Inc. It trades about 0.0 of its total potential returns per unit of risk. Aware Inc is currently generating about 0.02 per unit of volatility. If you would invest  172.00  in Aware Inc on October 11, 2024 and sell it today you would lose (15.00) from holding Aware Inc or give up 8.72% of portfolio value over 90 days.

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

Marin Software  vs.  Aware Inc

Marin Software

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marin Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Marin Software is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Aware Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aware Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Marin Software and Aware

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

The idea behind Marin Software and Aware Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..