Correlation Between MARRIOTT and Mosaic

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

By analyzing existing cross correlation between MARRIOTT INTERNATIONAL INC and The Mosaic, you can compare the effects of market volatilities on MARRIOTT and Mosaic 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 MARRIOTT with a short position of Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARRIOTT and Mosaic.

Diversification Opportunities for MARRIOTT and Mosaic

0.36

Correlation Coefficient

MARRIOTT  Mosaic

Weak diversification

The 3 months correlation between MARRIOTT and Mosaic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MARRIOTT INTERNATIONAL INC and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic and MARRIOTT 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 MARRIOTT INTERNATIONAL INC are associated (or correlated) with Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of MARRIOTT i.e., MARRIOTT and Mosaic go up and down completely randomly.

Pair Corralation between MARRIOTT and Mosaic

Assuming the 90 days trading horizon MARRIOTT INTERNATIONAL INC is expected to under-perform the Mosaic. But the bond apears to be less risky and, when comparing its historical volatility, MARRIOTT INTERNATIONAL INC is 3.07 times less risky than Mosaic. The bond trades about -0.29 of its potential returns per unit of risk. The The Mosaic is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,520  in The Mosaic on September 27, 2024 and sell it today you would lose (93.00) from holding The Mosaic or give up 3.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

MARRIOTT INTERNATIONAL INC  vs.  The Mosaic

MARRIOTT INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mosaic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Mosaic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MARRIOTT and Mosaic

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

The idea behind MARRIOTT INTERNATIONAL INC and The Mosaic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.