Correlation Between Magellan Financial and Group 6
Can any of the company-specific risk be diversified away by investing in both Magellan Financial and Group 6 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 Group 6 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 Group 6 Metals, you can compare the effects of market volatilities on Magellan Financial and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and Group 6.
Diversification Opportunities for Magellan Financial and Group 6
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Magellan and Group is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 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 Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Magellan Financial i.e., Magellan Financial and Group 6 go up and down completely randomly.
Pair Corralation between Magellan Financial and Group 6
Assuming the 90 days trading horizon Magellan Financial Group is expected to generate 0.41 times more return on investment than Group 6. However, Magellan Financial Group is 2.45 times less risky than Group 6. It trades about 0.05 of its potential returns per unit of risk. Group 6 Metals is currently generating about -0.04 per unit of risk. If you would invest 851.00 in Magellan Financial Group on November 3, 2024 and sell it today you would earn a total of 200.00 from holding Magellan Financial Group or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magellan Financial Group vs. Group 6 Metals
Performance |
| Timeline |
| Magellan Financial |
| Group 6 Metals |
Magellan Financial and Group 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Financial and Group 6
The main advantage of trading using opposite Magellan Financial and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Financial position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.| Magellan Financial vs. Kip McGrath Education | Magellan Financial vs. Clime Investment Management | Magellan Financial vs. Autosports Group | Magellan Financial vs. Qbe Insurance Group |
| Group 6 vs. Austco Healthcare | Group 6 vs. Sonic Healthcare | Group 6 vs. Aurelia Metals | Group 6 vs. Apiam Animal Health |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |