Correlation Between International Business and Magenta Therapeutics
Can any of the company-specific risk be diversified away by investing in both International Business and Magenta Therapeutics 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 International Business and Magenta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and Magenta Therapeutics, you can compare the effects of market volatilities on International Business and Magenta Therapeutics 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 International Business with a short position of Magenta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Magenta Therapeutics.
Diversification Opportunities for International Business and Magenta Therapeutics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Magenta is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Magenta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magenta Therapeutics and International Business 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 International Business Machines are associated (or correlated) with Magenta Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magenta Therapeutics has no effect on the direction of International Business i.e., International Business and Magenta Therapeutics go up and down completely randomly.
Pair Corralation between International Business and Magenta Therapeutics
Considering the 90-day investment horizon International Business is expected to generate 2.69 times less return on investment than Magenta Therapeutics. But when comparing it to its historical volatility, International Business Machines is 2.13 times less risky than Magenta Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Magenta Therapeutics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Magenta Therapeutics on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Magenta Therapeutics or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.56% |
| Values | Daily Returns |
International Business Machine vs. Magenta Therapeutics
Performance |
| Timeline |
| International Business |
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Business and Magenta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Magenta Therapeutics
The main advantage of trading using opposite International Business and Magenta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Magenta Therapeutics 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 Magenta Therapeutics will offset losses from the drop in Magenta Therapeutics' long position.| International Business vs. RLJ Lodging Trust | International Business vs. Aquagold International | International Business vs. Stepstone Group | International Business vs. Morningstar Unconstrained Allocation |
| Magenta Therapeutics vs. Assembly Biosciences | Magenta Therapeutics vs. Instil Bio | Magenta Therapeutics vs. Nuvation Bio | Magenta Therapeutics vs. Achilles Therapeutics PLC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |