Correlation Between EAST SIDE and Magna International
Can any of the company-specific risk be diversified away by investing in both EAST SIDE and Magna International 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 EAST SIDE and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAST SIDE GAMES and Magna International, you can compare the effects of market volatilities on EAST SIDE and Magna International 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 EAST SIDE with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAST SIDE and Magna International.
Diversification Opportunities for EAST SIDE and Magna International
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EAST and Magna is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding EAST SIDE GAMES and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and EAST SIDE 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 EAST SIDE GAMES are associated (or correlated) with Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of EAST SIDE i.e., EAST SIDE and Magna International go up and down completely randomly.
Pair Corralation between EAST SIDE and Magna International
Assuming the 90 days horizon EAST SIDE GAMES is expected to under-perform the Magna International. In addition to that, EAST SIDE is 2.11 times more volatile than Magna International. It trades about -0.18 of its total potential returns per unit of risk. Magna International is currently generating about 0.29 per unit of volatility. If you would invest 3,574 in Magna International on September 2, 2024 and sell it today you would earn a total of 646.00 from holding Magna International or generate 18.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAST SIDE GAMES vs. Magna International
Performance |
| Timeline |
| EAST SIDE GAMES |
| Magna International |
EAST SIDE and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAST SIDE and Magna International
The main advantage of trading using opposite EAST SIDE and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAST SIDE position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| EAST SIDE vs. Nintendo Co | EAST SIDE vs. Sea Limited | EAST SIDE vs. Superior Plus Corp | EAST SIDE vs. NMI Holdings |
| Magna International vs. PT Astra International | Magna International vs. Superior Plus Corp | Magna International vs. NMI Holdings | Magna International vs. Origin Agritech |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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