Correlation Between Marketing Worldwide and ECARX Holdings

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

By analyzing existing cross correlation between Marketing Worldwide and ECARX Holdings Warrants, you can compare the effects of market volatilities on Marketing Worldwide and ECARX Holdings 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 Marketing Worldwide with a short position of ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marketing Worldwide and ECARX Holdings.

Diversification Opportunities for Marketing Worldwide and ECARX Holdings

-0.21

Correlation Coefficient

Marketing Worldwide  ECARX Holdings

Very good diversification

The 3 months correlation between Marketing and ECARX is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Marketing Worldwide and ECARX Holdings Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Warrants and Marketing Worldwide 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 Marketing Worldwide are associated (or correlated) with ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Warrants has no effect on the direction of Marketing Worldwide i.e., Marketing Worldwide and ECARX Holdings go up and down completely randomly.

Pair Corralation between Marketing Worldwide and ECARX Holdings

Given the investment horizon of 90 days Marketing Worldwide is expected to generate 2.25 times more return on investment than ECARX Holdings. However, Marketing Worldwide is 2.25 times more volatile than ECARX Holdings Warrants. It trades about 0.13 of its potential returns per unit of risk. ECARX Holdings Warrants is currently generating about 0.07 per unit of risk. If you would invest  0.07  in Marketing Worldwide on December 4, 2024 and sell it today you would lose (0.06) from holding Marketing Worldwide or give up 85.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.89%
Values	Daily Returns

Marketing Worldwide  vs.  ECARX Holdings Warrants

Marketing Worldwide

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marketing Worldwide are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Marketing Worldwide exhibited solid returns over the last few months and may actually be approaching a breakup point.

ECARX Holdings Warrants

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ECARX Holdings Warrants are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, ECARX Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marketing Worldwide and ECARX Holdings

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

The idea behind Marketing Worldwide and ECARX Holdings Warrants 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.