Correlation Between Marcus and Markel

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Can any of the company-specific risk be diversified away by investing in both Marcus and Markel 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 Markel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcus and Markel, you can compare the effects of market volatilities on Marcus and Markel 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 Markel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Markel.

Diversification Opportunities for Marcus and Markel

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Marcus and Markel is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Markel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markel 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 Markel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markel has no effect on the direction of Marcus i.e., Marcus and Markel go up and down completely randomly.

Pair Corralation between Marcus and Markel

Considering the 90-day investment horizon Marcus is expected to under-perform the Markel. In addition to that, Marcus is 1.51 times more volatile than Markel. It trades about 0.0 of its total potential returns per unit of risk. Markel is currently generating about 0.04 per unit of volatility. If you would invest  109,013  in Markel on October 29, 2022 and sell it today you would earn a total of  31,522  from holding Markel or generate 28.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Marcus  vs.  Markel

 Performance (%) 
       Timeline  
Marcus 
Marcus Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marcus are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Marcus is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Marcus Price Channel

Markel 
Markel Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Markel are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal forward-looking signals, Markel revealed solid returns over the last few months and may actually be approaching a breakup point.

Markel Price Channel

Marcus and Markel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marcus and Markel

The main advantage of trading using opposite Marcus and Markel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus position performs unexpectedly, Markel 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 Markel will offset losses from the drop in Markel's long position.
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The idea behind Marcus and Markel 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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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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