Correlation Between Patria Investments and Marygold Companies

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

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

Diversification Opportunities for Patria Investments and Marygold Companies

-0.19

Correlation Coefficient

Patria Investments  Marygold Companies

Good diversification

The 3 months correlation between Patria and Marygold is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments and Marygold Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marygold Companies and Patria Investments 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 Patria Investments are associated (or correlated) with Marygold Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marygold Companies has no effect on the direction of Patria Investments i.e., Patria Investments and Marygold Companies go up and down completely randomly.

Pair Corralation between Patria Investments and Marygold Companies

Considering the 90-day investment horizon Patria Investments is expected to generate 0.34 times more return on investment than Marygold Companies. However, Patria Investments is 2.94 times less risky than Marygold Companies. It trades about 0.04 of its potential returns per unit of risk. Marygold Companies is currently generating about -0.13 per unit of risk. If you would invest  1,126  in Patria Investments on December 21, 2024 and sell it today you would earn a total of  45.00  from holding Patria Investments or generate 4.0% return on investment over 90 days.

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

Patria Investments  vs.  Marygold Companies

Patria Investments

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Patria Investments is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Marygold Companies

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Patria Investments and Marygold Companies

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

The idea behind Patria Investments and Marygold Companies 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.