Correlation Between Magellan Financial and Aeon Metals
Can any of the company-specific risk be diversified away by investing in both Magellan Financial and Aeon Metals 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 Magellan Financial and Aeon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magellan Financial Group and Aeon Metals, you can compare the effects of market volatilities on Magellan Financial and Aeon Metals 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 Magellan Financial with a short position of Aeon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and Aeon Metals.
Diversification Opportunities for Magellan Financial and Aeon Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Magellan and Aeon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group and Aeon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Metals and Magellan Financial 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 Magellan Financial Group are associated (or correlated) with Aeon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Metals has no effect on the direction of Magellan Financial i.e., Magellan Financial and Aeon Metals go up and down completely randomly.
Pair Corralation between Magellan Financial and Aeon Metals
Assuming the 90 days trading horizon Magellan Financial Group is expected to generate 0.38 times more return on investment than Aeon Metals. However, Magellan Financial Group is 2.63 times less risky than Aeon Metals. It trades about 0.12 of its potential returns per unit of risk. Aeon Metals is currently generating about -0.04 per unit of risk. If you would invest 815.00 in Magellan Financial Group on August 31, 2024 and sell it today you would earn a total of 278.00 from holding Magellan Financial Group or generate 34.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Magellan Financial Group vs. Aeon Metals
Performance |
| Timeline |
| Magellan Financial |
| Aeon Metals |
Magellan Financial and Aeon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Financial and Aeon Metals
The main advantage of trading using opposite Magellan Financial and Aeon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Financial position performs unexpectedly, Aeon Metals 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 Aeon Metals will offset losses from the drop in Aeon Metals' long position.| Magellan Financial vs. Energy Resources | Magellan Financial vs. 88 Energy | Magellan Financial vs. Amani Gold | Magellan Financial vs. A1 Investments Resources |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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