Correlation Between EZCORP and Marcus

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

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

Diversification Opportunities for EZCORP and Marcus

0.33

Correlation Coefficient

EZCORP  Marcus

Weak diversification

The 3 months correlation between EZCORP and Marcus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus and EZCORP 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 EZCORP Inc are associated (or correlated) with Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of EZCORP i.e., EZCORP and Marcus go up and down completely randomly.

Pair Corralation between EZCORP and Marcus

Given the investment horizon of 90 days EZCORP Inc is expected to generate 1.58 times more return on investment than Marcus. However, EZCORP is 1.58 times more volatile than Marcus. It trades about 0.08 of its potential returns per unit of risk. Marcus is currently generating about -0.33 per unit of risk. If you would invest  1,064  in EZCORP Inc on January 20, 2024 and sell it today you would earn a total of  32.00  from holding EZCORP Inc or generate 3.01% return on investment over 90 days.

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

EZCORP Inc  vs.  Marcus

EZCORP Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EZCORP Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, EZCORP showed solid returns over the last few months and may actually be approaching a breakup point.

Marcus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Marcus is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EZCORP and Marcus

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

The idea behind EZCORP Inc and Marcus 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 Commodity Directory module to find actively traded commodities issued by global exchanges.