Correlation Between Magna International and 17 Education
Can any of the company-specific risk be diversified away by investing in both Magna International and 17 Education 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 17 Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna International and 17 Education Technology, you can compare the effects of market volatilities on Magna International and 17 Education 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 17 Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna International and 17 Education.
Diversification Opportunities for Magna International and 17 Education
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magna and 17 Education is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Magna International and 17 Education Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 17 Education Technology 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 17 Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 17 Education Technology has no effect on the direction of Magna International i.e., Magna International and 17 Education go up and down completely randomly.
Pair Corralation between Magna International and 17 Education
Considering the 90-day investment horizon Magna International is expected to generate 0.42 times more return on investment than 17 Education. However, Magna International is 2.38 times less risky than 17 Education. It trades about 0.01 of its potential returns per unit of risk. 17 Education Technology is currently generating about -0.03 per unit of risk. If you would invest 4,509 in Magna International on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Magna International or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magna International vs. 17 Education Technology
Performance |
| Timeline |
| Magna International |
| 17 Education Technology |
Magna International and 17 Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna International and 17 Education
The main advantage of trading using opposite Magna International and 17 Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna International position performs unexpectedly, 17 Education 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 17 Education will offset losses from the drop in 17 Education's long position.| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
| 17 Education vs. Sunlands Technology Group | 17 Education vs. Ihuman Inc | 17 Education vs. Gaotu Techedu DRC | 17 Education vs. New Oriental Education |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |