Correlation Between Marcus Millichap and FLJ

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

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

Diversification Opportunities for Marcus Millichap and FLJ

0.29

Correlation Coefficient

Marcus Millichap  FLJ

Modest diversification

The 3 months correlation between Marcus and FLJ is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and FLJ Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLJ Group and Marcus Millichap 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 Millichap are associated (or correlated) with FLJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLJ Group has no effect on the direction of Marcus Millichap i.e., Marcus Millichap and FLJ go up and down completely randomly.

Pair Corralation between Marcus Millichap and FLJ

If you would invest  3,987  in Marcus Millichap on September 13, 2024 and sell it today you would earn a total of  95.00  from holding Marcus Millichap or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Marcus Millichap  vs.  FLJ Group

Marcus Millichap

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus Millichap are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, Marcus Millichap is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

FLJ Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FLJ Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady essential indicators, FLJ is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Marcus Millichap and FLJ

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

The idea behind Marcus Millichap and FLJ 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.