Correlation Between Freedom Bank and Magnite
Can any of the company-specific risk be diversified away by investing in both Freedom Bank 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 Freedom Bank and Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Bank of and Magnite, you can compare the effects of market volatilities on Freedom Bank 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 Freedom Bank with a short position of Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Magnite.
Diversification Opportunities for Freedom Bank and Magnite
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Freedom and Magnite is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Freedom Bank 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 Freedom Bank of 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 Freedom Bank i.e., Freedom Bank and Magnite go up and down completely randomly.
Pair Corralation between Freedom Bank and Magnite
Given the investment horizon of 90 days Freedom Bank is expected to generate 4.43 times less return on investment than Magnite. But when comparing it to its historical volatility, Freedom Bank of is 5.56 times less risky than Magnite. It trades about 0.11 of its potential returns per unit of risk. 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 |
Freedom Bank of vs. Magnite
Performance |
| Timeline |
| Freedom Bank |
| Magnite |
Freedom Bank and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Magnite
The main advantage of trading using opposite Freedom Bank and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank 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.| Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp | Freedom Bank vs. Bank of Idaho |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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