Correlation Between Magna International and Top KingWin
Can any of the company-specific risk be diversified away by investing in both Magna International and Top KingWin 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 Top KingWin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna International and Top KingWin Ltd, you can compare the effects of market volatilities on Magna International and Top KingWin 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 Top KingWin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna International and Top KingWin.
Diversification Opportunities for Magna International and Top KingWin
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magna and Top is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Magna International and Top KingWin Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Magna International i.e., Magna International and Top KingWin go up and down completely randomly.
Pair Corralation between Magna International and Top KingWin
Considering the 90-day investment horizon Magna International is expected to generate 0.27 times more return on investment than Top KingWin. However, Magna International is 3.71 times less risky than Top KingWin. It trades about -0.38 of its potential returns per unit of risk. Top KingWin Ltd is currently generating about -0.25 per unit of risk. If you would invest 4,529 in Magna International on October 7, 2024 and sell it today you would lose (403.00) from holding Magna International or give up 8.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.0% |
| Values | Daily Returns |
Magna International vs. Top KingWin Ltd
Performance |
| Timeline |
| Magna International |
| Top KingWin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Magna International and Top KingWin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna International and Top KingWin
The main advantage of trading using opposite Magna International and Top KingWin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna International position performs unexpectedly, Top KingWin 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 Top KingWin will offset losses from the drop in Top KingWin's long position.| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
| Top KingWin vs. Goosehead Insurance | Top KingWin vs. Omni Health | Top KingWin vs. RadNet Inc | Top KingWin vs. Life Insurance |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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