Correlation Between Marcus and Luduson G

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

By analyzing existing cross correlation between Marcus and Luduson G, you can compare the effects of market volatilities on Marcus and Luduson G 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 Luduson G. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Luduson G.

Diversification Opportunities for Marcus and Luduson G

0.84

Correlation Coefficient

Marcus  Luduson G

Very poor diversification

The 3 months correlation between Marcus and Luduson is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Luduson G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luduson G 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 Luduson G. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luduson G has no effect on the direction of Marcus i.e., Marcus and Luduson G go up and down completely randomly.

Pair Corralation between Marcus and Luduson G

Considering the 90-day investment horizon Marcus is expected to generate 0.06 times more return on investment than Luduson G. However, Marcus is 17.92 times less risky than Luduson G. It trades about -0.22 of its potential returns per unit of risk. Luduson G is currently generating about -0.02 per unit of risk. If you would invest  1,461  in Marcus on February 20, 2024 and sell it today you would lose (371.00) from holding Marcus or give up 25.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

Marcus  vs.  Luduson G

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 unsteady performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Luduson G

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Luduson G has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Marcus and Luduson G

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

The idea behind Marcus and Luduson G 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.