Correlation Between Marimed and Shell PLC

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

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

Diversification Opportunities for Marimed and Shell PLC

0.12

Correlation Coefficient

Marimed  Shell PLC

Average diversification

The 3 months correlation between Marimed and Shell is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marimed and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC and Marimed 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 Marimed are associated (or correlated) with Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of Marimed i.e., Marimed and Shell PLC go up and down completely randomly.

Pair Corralation between Marimed and Shell PLC

Given the investment horizon of 90 days Marimed is expected to generate 3.4 times less return on investment than Shell PLC. In addition to that, Marimed is 2.3 times more volatile than Shell PLC. It trades about 0.01 of its total potential returns per unit of risk. Shell PLC is currently generating about 0.09 per unit of volatility. If you would invest  3,041  in Shell PLC on May 1, 2025 and sell it today you would earn a total of  444.00  from holding Shell PLC or generate 14.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Marimed  vs.  Shell PLC

Marimed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marimed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Marimed is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Shell PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shell PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Shell PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marimed and Shell PLC

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

The idea behind Marimed and Shell PLC 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.