Correlation Between 31620MBV7 and Marine Products

Can any of the company-specific risk be diversified away by investing in both 31620MBV7 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 31620MBV7 and Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US31620MBV72 and Marine Products, you can compare the effects of market volatilities on 31620MBV7 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 31620MBV7 with a short position of Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of 31620MBV7 and Marine Products.

Diversification Opportunities for 31620MBV7 and Marine Products

-0.09

Correlation Coefficient

31620MBV7  Marine Products

Good diversification

The 3 months correlation between 31620MBV7 and Marine is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding US31620MBV72 and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products and 31620MBV7 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 US31620MBV72 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 31620MBV7 i.e., 31620MBV7 and Marine Products go up and down completely randomly.

Pair Corralation between 31620MBV7 and Marine Products

Assuming the 90 days trading horizon US31620MBV72 is expected to generate 0.12 times more return on investment than Marine Products. However, US31620MBV72 is 8.06 times less risky than Marine Products. It trades about 0.01 of its potential returns per unit of risk. Marine Products is currently generating about -0.1 per unit of risk. If you would invest  9,967  in US31620MBV72 on December 2, 2024 and sell it today you would earn a total of  15.00  from holding US31620MBV72 or generate 0.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

US31620MBV72  vs.  Marine Products

US31620MBV72

Risk-Adjusted Performance

Very Weak

Over the last 90 days US31620MBV72 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 31620MBV7 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

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with 31620MBV7 and Marine Products

The main advantage of trading using opposite 31620MBV7 and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 31620MBV7 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 US31620MBV72 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.