Correlation Between Marchex and Integral

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

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

Diversification Opportunities for Marchex and Integral

-0.01

Correlation Coefficient

Marchex  Integral

Good diversification

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

Pair Corralation between Marchex and Integral

Given the investment horizon of 90 days Marchex is expected to under-perform the Integral. In addition to that, Marchex is 1.25 times more volatile than Integral Ad Science. It trades about -0.03 of its total potential returns per unit of risk. Integral Ad Science is currently generating about 0.02 per unit of volatility. If you would invest  1,150  in Integral Ad Science on September 3, 2024 and sell it today you would earn a total of  4.00  from holding Integral Ad Science or generate 0.35% return on investment over 90 days.

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

Marchex  vs.  Integral Ad Science

Marchex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marchex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Integral Ad Science

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Marchex and Integral

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

The idea behind Marchex and Integral Ad Science 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 Transaction History module to view history of all your transactions and understand their impact on performance.