Correlation Between Maven Brands and Link Reservations

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

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

Diversification Opportunities for Maven Brands and Link Reservations

0.41

Correlation Coefficient

Maven Brands  Link Reservations

Very weak diversification

The 3 months correlation between Maven and Link is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Maven Brands and Link Reservations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Reservations and Maven Brands 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 Maven Brands are associated (or correlated) with Link Reservations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Reservations has no effect on the direction of Maven Brands i.e., Maven Brands and Link Reservations go up and down completely randomly.

Pair Corralation between Maven Brands and Link Reservations

If you would invest  0.20  in Link Reservations on October 8, 2024 and sell it today you would lose (0.10) from holding Link Reservations or give up 50.0% of portfolio value over 90 days.

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

Maven Brands  vs.  Link Reservations

Maven Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maven Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Link Reservations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Link Reservations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Link Reservations is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Maven Brands and Link Reservations

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

The idea behind Maven Brands and Link Reservations 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.