Correlation Between Magna International and FrontView REIT,
Can any of the company-specific risk be diversified away by investing in both Magna International and FrontView REIT, 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 Magna International and FrontView REIT, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna International and FrontView REIT,, you can compare the effects of market volatilities on Magna International and FrontView REIT, 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 Magna International with a short position of FrontView REIT,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna International and FrontView REIT,.
Diversification Opportunities for Magna International and FrontView REIT,
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magna and FrontView is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Magna International and FrontView REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FrontView REIT, and Magna International 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 Magna International are associated (or correlated) with FrontView REIT,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FrontView REIT, has no effect on the direction of Magna International i.e., Magna International and FrontView REIT, go up and down completely randomly.
Pair Corralation between Magna International and FrontView REIT,
Considering the 90-day investment horizon Magna International is expected to under-perform the FrontView REIT,. In addition to that, Magna International is 1.36 times more volatile than FrontView REIT,. It trades about -0.16 of its total potential returns per unit of risk. FrontView REIT, is currently generating about -0.08 per unit of volatility. If you would invest 1,871 in FrontView REIT, on September 23, 2024 and sell it today you would lose (48.00) from holding FrontView REIT, or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magna International vs. FrontView REIT,
Performance |
| Timeline |
| Magna International |
| FrontView REIT, |
Magna International and FrontView REIT, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna International and FrontView REIT,
The main advantage of trading using opposite Magna International and FrontView REIT, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna International position performs unexpectedly, FrontView REIT, 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 FrontView REIT, will offset losses from the drop in FrontView REIT,'s long position.| Magna International vs. Ford Motor | Magna International vs. General Motors | Magna International vs. Goodyear Tire Rubber | Magna International vs. Li Auto |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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