Correlation Between Deluxe and Magnite
Can any of the company-specific risk be diversified away by investing in both Deluxe 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 Deluxe and Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Magnite, you can compare the effects of market volatilities on Deluxe 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 Deluxe with a short position of Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Magnite.
Diversification Opportunities for Deluxe and Magnite
Almost no diversification
The 3 months correlation between Deluxe and Magnite is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Deluxe 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 Deluxe 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 Deluxe i.e., Deluxe and Magnite go up and down completely randomly.
Pair Corralation between Deluxe and Magnite
Considering the 90-day investment horizon Deluxe is expected to generate 1.24 times less return on investment than Magnite. But when comparing it to its historical volatility, Deluxe is 1.38 times less risky than Magnite. It trades about 0.34 of its potential returns per unit of risk. Magnite is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,280 in Magnite on August 28, 2024 and sell it today you would earn a total of 380.00 from holding Magnite or generate 29.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Magnite
Performance |
| Timeline |
| Deluxe |
| Magnite |
Deluxe and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Magnite
The main advantage of trading using opposite Deluxe and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe 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.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |