Correlation Between Arrow Financial and Magnite
Can any of the company-specific risk be diversified away by investing in both Arrow Financial and Magnite 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 Arrow Financial and Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and Magnite, you can compare the effects of market volatilities on Arrow Financial and Magnite 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 Arrow Financial with a short position of Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and Magnite.
Diversification Opportunities for Arrow Financial and Magnite
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and Magnite is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Arrow Financial 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 Arrow Financial are associated (or correlated) with Magnite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnite has no effect on the direction of Arrow Financial i.e., Arrow Financial and Magnite go up and down completely randomly.
Pair Corralation between Arrow Financial and Magnite
Given the investment horizon of 90 days Arrow Financial is expected to under-perform the Magnite. But the stock apears to be less risky and, when comparing its historical volatility, Arrow Financial is 2.36 times less risky than Magnite. The stock trades about -0.14 of its potential returns per unit of risk. The Magnite is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,679 in Magnite on November 27, 2024 and sell it today you would earn a total of 90.00 from holding Magnite or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. Magnite
Performance |
| Timeline |
| Arrow Financial |
| Magnite |
Arrow Financial and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and Magnite
The main advantage of trading using opposite Arrow Financial and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite's long position.| Arrow Financial vs. Heritage Commerce Corp | Arrow Financial vs. Westamerica Bancorporation | Arrow Financial vs. Heritage Financial | Arrow Financial vs. National Bankshares |
| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Criteo Sa |
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 the Stocks Directory module to find actively traded stocks across global markets.
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