Correlation Between 256746AJ7 and Marine Products

Can any of the company-specific risk be diversified away by investing in both 256746AJ7 and Marine Products 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 256746AJ7 and Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DLTR 265 01 DEC 31 and Marine Products, you can compare the effects of market volatilities on 256746AJ7 and Marine Products 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 256746AJ7 with a short position of Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of 256746AJ7 and Marine Products.

Diversification Opportunities for 256746AJ7 and Marine Products

0.53

Correlation Coefficient

256746AJ7  Marine Products

Very weak diversification

The 3 months correlation between 256746AJ7 and Marine is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DLTR 265 01 DEC 31 and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products and 256746AJ7 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 DLTR 265 01 DEC 31 are associated (or correlated) with Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of 256746AJ7 i.e., 256746AJ7 and Marine Products go up and down completely randomly.

Pair Corralation between 256746AJ7 and Marine Products

Assuming the 90 days trading horizon DLTR 265 01 DEC 31 is expected to under-perform the Marine Products. But the bond apears to be less risky and, when comparing its historical volatility, DLTR 265 01 DEC 31 is 1.54 times less risky than Marine Products. The bond trades about -0.22 of its potential returns per unit of risk. The Marine Products is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  925.00  in Marine Products on October 20, 2024 and sell it today you would lose (11.00) from holding Marine Products or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

DLTR 265 01 DEC 31  vs.  Marine Products

DLTR 265 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DLTR 265 01 DEC 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 256746AJ7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Marine Products

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Marine Products is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 256746AJ7 and Marine Products

The main advantage of trading using opposite 256746AJ7 and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 256746AJ7 position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.

The idea behind DLTR 265 01 DEC 31 and Marine Products 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..