Correlation Between Newmark and Marcus Millichap

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

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

Diversification Opportunities for Newmark and Marcus Millichap

0.68

Correlation Coefficient

Newmark  Marcus Millichap

Poor diversification

The 3 months correlation between Newmark and Marcus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and Marcus Millichap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus Millichap and Newmark 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 Newmark Group are associated (or correlated) with Marcus Millichap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus Millichap has no effect on the direction of Newmark i.e., Newmark and Marcus Millichap go up and down completely randomly.

Pair Corralation between Newmark and Marcus Millichap

Given the investment horizon of 90 days Newmark Group is expected to generate 1.34 times more return on investment than Marcus Millichap. However, Newmark is 1.34 times more volatile than Marcus Millichap. It trades about 0.22 of its potential returns per unit of risk. Marcus Millichap is currently generating about 0.05 per unit of risk. If you would invest  1,101  in Newmark Group on May 6, 2025 and sell it today you would earn a total of  411.00  from holding Newmark Group or generate 37.33% return on investment over 90 days.

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

Newmark Group  vs.  Marcus Millichap

Newmark Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Newmark Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Newmark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Marcus Millichap

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus Millichap are ranked lower than 3 (%) 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.

Pair Trading with Newmark and Marcus Millichap

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

The idea behind Newmark Group and Marcus Millichap 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.