Correlation Between Luduson G and Marcus

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

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

Diversification Opportunities for Luduson G and Marcus

-0.78

Correlation Coefficient

Luduson G  Marcus

Pay attention - limited upside

The 3 months correlation between Luduson and Marcus is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Luduson G and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus and Luduson G 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 Luduson G 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 Luduson G i.e., Luduson G and Marcus go up and down completely randomly.

Pair Corralation between Luduson G and Marcus

Given the investment horizon of 90 days Luduson G is expected to under-perform the Marcus. In addition to that, Luduson G is 8.38 times more volatile than Marcus. It trades about -0.13 of its total potential returns per unit of risk. Marcus is currently generating about 0.35 per unit of volatility. If you would invest  1,405  in Marcus on September 3, 2024 and sell it today you would earn a total of  859.00  from holding Marcus or generate 61.14% return on investment over 90 days.

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

Luduson G  vs.  Marcus

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Marcus

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Marcus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Luduson G and Marcus

The main advantage of trading using opposite Luduson G and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luduson G 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 Luduson G 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 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.