Correlation Between Inventis and Magellan Financial
Can any of the company-specific risk be diversified away by investing in both Inventis and Magellan Financial 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 Inventis and Magellan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventis and Magellan Financial Group, you can compare the effects of market volatilities on Inventis and Magellan Financial 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 Inventis with a short position of Magellan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventis and Magellan Financial.
Diversification Opportunities for Inventis and Magellan Financial
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inventis and Magellan is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Inventis and Magellan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Financial and Inventis 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 Inventis are associated (or correlated) with Magellan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Financial has no effect on the direction of Inventis i.e., Inventis and Magellan Financial go up and down completely randomly.
Pair Corralation between Inventis and Magellan Financial
Assuming the 90 days trading horizon Inventis is expected to under-perform the Magellan Financial. But the stock apears to be less risky and, when comparing its historical volatility, Inventis is 1.32 times less risky than Magellan Financial. The stock trades about -0.08 of its potential returns per unit of risk. The Magellan Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 869.00 in Magellan Financial Group on August 25, 2024 and sell it today you would earn a total of 203.00 from holding Magellan Financial Group or generate 23.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventis vs. Magellan Financial Group
Performance |
| Timeline |
| Inventis |
| Magellan Financial |
Inventis and Magellan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventis and Magellan Financial
The main advantage of trading using opposite Inventis and Magellan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventis position performs unexpectedly, Magellan Financial 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 Magellan Financial will offset losses from the drop in Magellan Financial's long position.| Inventis vs. Jupiter Energy | Inventis vs. WA1 Resources | Inventis vs. Predictive Discovery | Inventis vs. Cooper Metals |
| Magellan Financial vs. National Australia Bank | Magellan Financial vs. National Australia Bank | Magellan Financial vs. Westpac Banking | Magellan Financial vs. National Australia Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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