Correlation Between Eshallgo and Magna International
Can any of the company-specific risk be diversified away by investing in both Eshallgo 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 Eshallgo and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eshallgo Class A and Magna International, you can compare the effects of market volatilities on Eshallgo 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 Eshallgo with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Magna International.
Diversification Opportunities for Eshallgo and Magna International
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eshallgo and Magna is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and Eshallgo 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 Eshallgo Class A 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 Eshallgo i.e., Eshallgo and Magna International go up and down completely randomly.
Pair Corralation between Eshallgo and Magna International
Given the investment horizon of 90 days Eshallgo Class A is expected to generate 3.65 times more return on investment than Magna International. However, Eshallgo is 3.65 times more volatile than Magna International. It trades about 0.41 of its potential returns per unit of risk. Magna International is currently generating about 0.13 per unit of risk. If you would invest 211.00 in Eshallgo Class A on August 24, 2024 and sell it today you would earn a total of 189.00 from holding Eshallgo Class A or generate 89.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eshallgo Class A vs. Magna International
Performance |
| Timeline |
| Eshallgo Class A |
| Magna International |
Eshallgo and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eshallgo and Magna International
The main advantage of trading using opposite Eshallgo and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eshallgo 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.| Eshallgo vs. Magna International | Eshallgo vs. NioCorp Developments Ltd | Eshallgo vs. ACG Metals Limited | Eshallgo vs. Eldorado Gold Corp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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