Correlation Between Magellan Financial and Iress
Can any of the company-specific risk be diversified away by investing in both Magellan Financial and Iress 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 Iress 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 Iress, you can compare the effects of market volatilities on Magellan Financial and Iress 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 Iress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and Iress.
Diversification Opportunities for Magellan Financial and Iress
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magellan and Iress is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group and Iress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iress 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 Iress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iress has no effect on the direction of Magellan Financial i.e., Magellan Financial and Iress go up and down completely randomly.
Pair Corralation between Magellan Financial and Iress
Assuming the 90 days trading horizon Magellan Financial Group is expected to generate 0.95 times more return on investment than Iress. However, Magellan Financial Group is 1.05 times less risky than Iress. It trades about 0.04 of its potential returns per unit of risk. Iress is currently generating about 0.01 per unit of risk. If you would invest 773.00 in Magellan Financial Group on September 12, 2024 and sell it today you would earn a total of 342.00 from holding Magellan Financial Group or generate 44.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magellan Financial Group vs. Iress
Performance |
| Timeline |
| Magellan Financial |
| Iress |
Magellan Financial and Iress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Financial and Iress
The main advantage of trading using opposite Magellan Financial and Iress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Financial position performs unexpectedly, Iress 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 Iress will offset losses from the drop in Iress' long position.| Magellan Financial vs. Centuria Industrial Reit | Magellan Financial vs. Tombador Iron | Magellan Financial vs. ACDC Metals | Magellan Financial vs. Bluescope Steel |
| Iress vs. Kkr Credit Income | Iress vs. Magellan Financial Group | Iress vs. Australian Unity Office | Iress vs. Bell Financial Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |