Correlation Between Marlin and XCAD Network

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

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

Diversification Opportunities for Marlin and XCAD Network

0.58

Correlation Coefficient

Marlin  XCAD Network

Very weak diversification

The 3 months correlation between Marlin and XCAD is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Marlin and XCAD Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCAD Network and Marlin 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 Marlin are associated (or correlated) with XCAD Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCAD Network has no effect on the direction of Marlin i.e., Marlin and XCAD Network go up and down completely randomly.

Pair Corralation between Marlin and XCAD Network

Assuming the 90 days trading horizon Marlin is expected to generate 0.82 times more return on investment than XCAD Network. However, Marlin is 1.22 times less risky than XCAD Network. It trades about -0.02 of its potential returns per unit of risk. XCAD Network is currently generating about -0.11 per unit of risk. If you would invest  2.48  in Marlin on January 29, 2024 and sell it today you would lose (0.39) from holding Marlin or give up 15.73% of portfolio value over 90 days.

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

Marlin  vs.  XCAD Network

Marlin

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marlin are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Marlin exhibited solid returns over the last few months and may actually be approaching a breakup point.

XCAD Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XCAD Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for XCAD Network shareholders.

Pair Trading with Marlin and XCAD Network

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

The idea behind Marlin and XCAD Network 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.