Correlation Between Legrand SA and Magnis Energy
Can any of the company-specific risk be diversified away by investing in both Legrand SA and Magnis Energy 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 Legrand SA and Magnis Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legrand SA ADR and Magnis Energy Technologies, you can compare the effects of market volatilities on Legrand SA and Magnis Energy 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 Legrand SA with a short position of Magnis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legrand SA and Magnis Energy.
Diversification Opportunities for Legrand SA and Magnis Energy
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legrand and Magnis is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Legrand SA ADR and Magnis Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnis Energy Techno and Legrand SA 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 Legrand SA ADR are associated (or correlated) with Magnis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnis Energy Techno has no effect on the direction of Legrand SA i.e., Legrand SA and Magnis Energy go up and down completely randomly.
Pair Corralation between Legrand SA and Magnis Energy
Assuming the 90 days horizon Legrand SA ADR is expected to under-perform the Magnis Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Legrand SA ADR is 4.66 times less risky than Magnis Energy. The pink sheet trades about -0.31 of its potential returns per unit of risk. The Magnis Energy Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Magnis Energy Technologies on September 1, 2024 and sell it today you would earn a total of 0.75 from holding Magnis Energy Technologies or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Legrand SA ADR vs. Magnis Energy Technologies
Performance |
| Timeline |
| Legrand SA ADR |
| Magnis Energy Techno |
Legrand SA and Magnis Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legrand SA and Magnis Energy
The main advantage of trading using opposite Legrand SA and Magnis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legrand SA position performs unexpectedly, Magnis Energy 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 Magnis Energy will offset losses from the drop in Magnis Energy's long position.| Legrand SA vs. AFC Energy plc | Legrand SA vs. Loop Energy | Legrand SA vs. Sunrise New Energy | Legrand SA vs. Energizer Holdings |
| Magnis Energy vs. AFC Energy plc | Magnis Energy vs. Loop Energy | Magnis Energy vs. Sunrise New Energy | Magnis Energy vs. Energizer Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |