Correlation Between Magna International and Paiute Oil
Can any of the company-specific risk be diversified away by investing in both Magna International and Paiute Oil 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 Paiute Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna International and Paiute Oil Mining, you can compare the effects of market volatilities on Magna International and Paiute Oil 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 Paiute Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna International and Paiute Oil.
Diversification Opportunities for Magna International and Paiute Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Magna and Paiute is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magna International and Paiute Oil Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paiute Oil Mining 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 Paiute Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paiute Oil Mining has no effect on the direction of Magna International i.e., Magna International and Paiute Oil go up and down completely randomly.
Pair Corralation between Magna International and Paiute Oil
If you would invest 4,250 in Magna International on August 28, 2024 and sell it today you would earn a total of 396.00 from holding Magna International or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magna International vs. Paiute Oil Mining
Performance |
| Timeline |
| Magna International |
| Paiute Oil Mining |
Magna International and Paiute Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna International and Paiute Oil
The main advantage of trading using opposite Magna International and Paiute Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna International position performs unexpectedly, Paiute Oil 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 Paiute Oil will offset losses from the drop in Paiute Oil's long position.| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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