Correlation Between Lycos Energy and Magna International
Can any of the company-specific risk be diversified away by investing in both Lycos Energy 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 Lycos Energy and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lycos Energy and Magna International, you can compare the effects of market volatilities on Lycos Energy 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 Lycos Energy with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lycos Energy and Magna International.
Diversification Opportunities for Lycos Energy and Magna International
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lycos and Magna is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lycos Energy and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and Lycos Energy 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 Lycos Energy 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 Lycos Energy i.e., Lycos Energy and Magna International go up and down completely randomly.
Pair Corralation between Lycos Energy and Magna International
Assuming the 90 days horizon Lycos Energy is expected to generate 2.13 times less return on investment than Magna International. In addition to that, Lycos Energy is 1.84 times more volatile than Magna International. It trades about 0.03 of its total potential returns per unit of risk. Magna International is currently generating about 0.12 per unit of volatility. If you would invest 6,109 in Magna International on September 13, 2024 and sell it today you would earn a total of 280.00 from holding Magna International or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lycos Energy vs. Magna International
Performance |
| Timeline |
| Lycos Energy |
| Magna International |
Lycos Energy and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lycos Energy and Magna International
The main advantage of trading using opposite Lycos Energy and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lycos Energy 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.| Lycos Energy vs. Gear Energy | Lycos Energy vs. Journey Energy | Lycos Energy vs. Yangarra Resources | Lycos Energy vs. Obsidian Energy |
| Magna International vs. Canadian National Railway | Magna International vs. Nutrien | Magna International vs. Restaurant Brands International | Magna International vs. Canadian Pacific Railway |
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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