Correlation Between Marcus and Beasley Broadcast

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

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

Diversification Opportunities for Marcus and Beasley Broadcast

0.11

Correlation Coefficient

Marcus  Beasley Broadcast

Average diversification

The 3 months correlation between Marcus and Beasley is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Beasley Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beasley Broadcast and Marcus 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 Marcus are associated (or correlated) with Beasley Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beasley Broadcast has no effect on the direction of Marcus i.e., Marcus and Beasley Broadcast go up and down completely randomly.

Pair Corralation between Marcus and Beasley Broadcast

Considering the 90-day investment horizon Marcus is expected to generate 0.28 times more return on investment than Beasley Broadcast. However, Marcus is 3.6 times less risky than Beasley Broadcast. It trades about -0.06 of its potential returns per unit of risk. Beasley Broadcast Group is currently generating about -0.02 per unit of risk. If you would invest  1,573  in Marcus on January 19, 2024 and sell it today you would lose (257.00) from holding Marcus or give up 16.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Marcus  vs.  Beasley Broadcast Group

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.

Beasley Broadcast

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beasley Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Marcus and Beasley Broadcast

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

The idea behind Marcus and Beasley Broadcast Group 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.