Correlation Between Perficient and Marine Products

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

Diversification Opportunities for Perficient and Marine Products

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Perficient and Marine is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Perficient and Marine Products Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products Corp and Perficient 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 Perficient are associated (or correlated) with Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products Corp has no effect on the direction of Perficient i.e., Perficient and Marine Products go up and down completely randomly.

Pair Corralation between Perficient and Marine Products

Given the investment horizon of 90 days Perficient is expected to under-perform the Marine Products. In addition to that, Perficient is 1.01 times more volatile than Marine Products Corp. It trades about -0.06 of its total potential returns per unit of risk. Marine Products Corp is currently generating about 0.01 per unit of volatility. If you would invest  1,194  in Marine Products Corp on August 31, 2022 and sell it today you would lose (34.00)  from holding Marine Products Corp or give up 2.85% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Perficient  vs.  Marine Products Corp

 Performance (%) 
       Timeline  
Perficient 
Perficient Performance
0 of 100
Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Perficient Price Channel

Marine Products Corp 
Marine Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marine Products Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Marine Products showed solid returns over the last few months and may actually be approaching a breakup point.

Marine Price Channel

Perficient and Marine Products Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Perficient and Marine Products

The main advantage of trading using opposite Perficient and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perficient position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.
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The idea behind Perficient and Marine Products Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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