Correlation Between Magellan Financial and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Magellan Financial and OOhMedia 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 OOhMedia 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 oOhMedia, you can compare the effects of market volatilities on Magellan Financial and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and OOhMedia.
Diversification Opportunities for Magellan Financial and OOhMedia
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magellan and OOhMedia is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Magellan Financial i.e., Magellan Financial and OOhMedia go up and down completely randomly.
Pair Corralation between Magellan Financial and OOhMedia
Assuming the 90 days trading horizon Magellan Financial Group is expected to generate 1.1 times more return on investment than OOhMedia. However, Magellan Financial is 1.1 times more volatile than oOhMedia. It trades about 0.07 of its potential returns per unit of risk. oOhMedia is currently generating about -0.01 per unit of risk. If you would invest 788.00 in Magellan Financial Group on September 3, 2024 and sell it today you would earn a total of 283.00 from holding Magellan Financial Group or generate 35.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magellan Financial Group vs. oOhMedia
Performance |
| Timeline |
| Magellan Financial |
| oOhMedia |
Magellan Financial and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Financial and OOhMedia
The main advantage of trading using opposite Magellan Financial and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Financial position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Magellan Financial vs. Audio Pixels Holdings | Magellan Financial vs. Iodm | Magellan Financial vs. TTG Fintech | Magellan Financial vs. Mantle Minerals Limited |
| OOhMedia vs. Vulcan Steel | OOhMedia vs. Champion Iron | OOhMedia vs. The Environmental Group | OOhMedia vs. Nufarm Finance NZ |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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