Correlation Between DATA MODUL and Magna International
Can any of the company-specific risk be diversified away by investing in both DATA MODUL 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 DATA MODUL and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATA MODUL and Magna International, you can compare the effects of market volatilities on DATA MODUL 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 DATA MODUL with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATA MODUL and Magna International.
Diversification Opportunities for DATA MODUL and Magna International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DATA and Magna is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding DATA MODUL and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and DATA MODUL 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 DATA MODUL 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 DATA MODUL i.e., DATA MODUL and Magna International go up and down completely randomly.
Pair Corralation between DATA MODUL and Magna International
Assuming the 90 days trading horizon DATA MODUL is expected to under-perform the Magna International. In addition to that, DATA MODUL is 1.56 times more volatile than Magna International. It trades about -0.1 of its total potential returns per unit of risk. Magna International is currently generating about -0.13 per unit of volatility. If you would invest 4,065 in Magna International on October 24, 2024 and sell it today you would lose (150.00) from holding Magna International or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATA MODUL vs. Magna International
Performance |
| Timeline |
| DATA MODUL |
| Magna International |
DATA MODUL and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATA MODUL and Magna International
The main advantage of trading using opposite DATA MODUL and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATA MODUL 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.| DATA MODUL vs. Sumitomo Rubber Industries | DATA MODUL vs. THRACE PLASTICS | DATA MODUL vs. USWE SPORTS AB | DATA MODUL vs. ANTA SPORTS PRODUCT |
| Magna International vs. GREENX METALS LTD | Magna International vs. FIREWEED METALS P | Magna International vs. Northern Data AG | Magna International vs. China Datang |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |