Correlation Between Magellan Financial and Havilah Resources
Can any of the company-specific risk be diversified away by investing in both Magellan Financial and Havilah Resources 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 Havilah Resources 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 Havilah Resources, you can compare the effects of market volatilities on Magellan Financial and Havilah Resources 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 Havilah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and Havilah Resources.
Diversification Opportunities for Magellan Financial and Havilah Resources
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Magellan and Havilah is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group and Havilah Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havilah Resources 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 Havilah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havilah Resources has no effect on the direction of Magellan Financial i.e., Magellan Financial and Havilah Resources go up and down completely randomly.
Pair Corralation between Magellan Financial and Havilah Resources
Assuming the 90 days trading horizon Magellan Financial Group is expected to generate 0.57 times more return on investment than Havilah Resources. However, Magellan Financial Group is 1.76 times less risky than Havilah Resources. It trades about 0.04 of its potential returns per unit of risk. Havilah Resources is currently generating about 0.0 per unit of risk. If you would invest 799.00 in Magellan Financial Group on September 3, 2024 and sell it today you would earn a total of 294.00 from holding Magellan Financial Group or generate 36.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magellan Financial Group vs. Havilah Resources
Performance |
| Timeline |
| Magellan Financial |
| Havilah Resources |
Magellan Financial and Havilah Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Financial and Havilah Resources
The main advantage of trading using opposite Magellan Financial and Havilah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Financial position performs unexpectedly, Havilah Resources 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 Havilah Resources will offset losses from the drop in Havilah Resources' long position.| Magellan Financial vs. Audio Pixels Holdings | Magellan Financial vs. Iodm | Magellan Financial vs. Nsx | Magellan Financial vs. TTG Fintech |
| Havilah Resources vs. Magellan Financial Group | Havilah Resources vs. National Australia Bank | Havilah Resources vs. Kkr Credit Income | Havilah Resources vs. Queste Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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