Correlation Between Fluent and Magnite
Can any of the company-specific risk be diversified away by investing in both Fluent 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 Fluent and Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Magnite, you can compare the effects of market volatilities on Fluent 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 Fluent with a short position of Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Magnite.
Diversification Opportunities for Fluent and Magnite
Good diversification
The 3 months correlation between Fluent and Magnite is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Fluent 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 Fluent Inc 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 Fluent i.e., Fluent and Magnite go up and down completely randomly.
Pair Corralation between Fluent and Magnite
Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Magnite. In addition to that, Fluent is 1.05 times more volatile than Magnite. It trades about -0.08 of its total potential returns per unit of risk. Magnite is currently generating about 0.31 per unit of volatility. If you would invest 1,271 in Magnite on August 31, 2024 and sell it today you would earn a total of 391.00 from holding Magnite or generate 30.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. Magnite
Performance |
| Timeline |
| Fluent Inc |
| Magnite |
Fluent and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Magnite
The main advantage of trading using opposite Fluent and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent 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.| Fluent vs. Marchex | Fluent vs. Dolphin Entertainment | Fluent vs. Beyond Commerce | Fluent vs. MGO Global Common |
| Magnite vs. Mirriad Advertising plc | Magnite vs. INEO Tech Corp | Magnite vs. Marchex | Magnite vs. Entravision Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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