Correlation Between Magellan Financial and Pearl Gull
Can any of the company-specific risk be diversified away by investing in both Magellan Financial and Pearl Gull 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 Pearl Gull 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 Pearl Gull Iron, you can compare the effects of market volatilities on Magellan Financial and Pearl Gull 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 Pearl Gull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and Pearl Gull.
Diversification Opportunities for Magellan Financial and Pearl Gull
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magellan and Pearl is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group and Pearl Gull Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pearl Gull Iron 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 Pearl Gull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pearl Gull Iron has no effect on the direction of Magellan Financial i.e., Magellan Financial and Pearl Gull go up and down completely randomly.
Pair Corralation between Magellan Financial and Pearl Gull
Assuming the 90 days trading horizon Magellan Financial Group is expected to under-perform the Pearl Gull. In addition to that, Magellan Financial is 1.48 times more volatile than Pearl Gull Iron. It trades about -0.12 of its total potential returns per unit of risk. Pearl Gull Iron is currently generating about 0.01 per unit of volatility. If you would invest 1.30 in Pearl Gull Iron on November 6, 2024 and sell it today you would earn a total of 0.00 from holding Pearl Gull Iron or generate 0.0% 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. Pearl Gull Iron
Performance |
| Timeline |
| Magellan Financial |
| Pearl Gull Iron |
Magellan Financial and Pearl Gull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Financial and Pearl Gull
The main advantage of trading using opposite Magellan Financial and Pearl Gull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Financial position performs unexpectedly, Pearl Gull 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 Pearl Gull will offset losses from the drop in Pearl Gull's long position.| Magellan Financial vs. Latitude Financial Services | Magellan Financial vs. EROAD | Magellan Financial vs. BSP Financial Group | Magellan Financial vs. Kkr Credit Income |
| Pearl Gull vs. Bell Financial Group | Pearl Gull vs. ARN Media Limited | Pearl Gull vs. Infomedia | Pearl Gull vs. Wt 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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