Correlation Between Magnum Goldcorp and Verizon Communications
Can any of the company-specific risk be diversified away by investing in both Magnum Goldcorp and Verizon Communications 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 Magnum Goldcorp and Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnum Goldcorp and Verizon Communications CDR, you can compare the effects of market volatilities on Magnum Goldcorp and Verizon Communications 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 Magnum Goldcorp with a short position of Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnum Goldcorp and Verizon Communications.
Diversification Opportunities for Magnum Goldcorp and Verizon Communications
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnum and Verizon is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Magnum Goldcorp and Verizon Communications CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications and Magnum Goldcorp 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 Magnum Goldcorp are associated (or correlated) with Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Magnum Goldcorp i.e., Magnum Goldcorp and Verizon Communications go up and down completely randomly.
Pair Corralation between Magnum Goldcorp and Verizon Communications
Assuming the 90 days horizon Magnum Goldcorp is expected to generate 20.4 times more return on investment than Verizon Communications. However, Magnum Goldcorp is 20.4 times more volatile than Verizon Communications CDR. It trades about 0.11 of its potential returns per unit of risk. Verizon Communications CDR is currently generating about -0.02 per unit of risk. If you would invest 4.00 in Magnum Goldcorp on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Magnum Goldcorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnum Goldcorp vs. Verizon Communications CDR
Performance |
| Timeline |
| Magnum Goldcorp |
| Verizon Communications |
Magnum Goldcorp and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnum Goldcorp and Verizon Communications
The main advantage of trading using opposite Magnum Goldcorp and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnum Goldcorp position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| Magnum Goldcorp vs. Bank of Nova | Magnum Goldcorp vs. Olympia Financial Group | Magnum Goldcorp vs. Information Services | Magnum Goldcorp vs. First National Financial |
| Verizon Communications vs. Berkshire Hathaway CDR | Verizon Communications vs. Microsoft Corp CDR | Verizon Communications vs. Apple Inc CDR | Verizon Communications vs. Alphabet Inc CDR |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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