Correlation Between Magnite and ALR Technologies
Can any of the company-specific risk be diversified away by investing in both Magnite and ALR Technologies 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 Magnite and ALR Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and ALR Technologies, you can compare the effects of market volatilities on Magnite and ALR Technologies 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 Magnite with a short position of ALR Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and ALR Technologies.
Diversification Opportunities for Magnite and ALR Technologies
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnite and ALR is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and ALR Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALR Technologies and Magnite 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 Magnite are associated (or correlated) with ALR Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALR Technologies has no effect on the direction of Magnite i.e., Magnite and ALR Technologies go up and down completely randomly.
Pair Corralation between Magnite and ALR Technologies
Given the investment horizon of 90 days Magnite is expected to generate 0.2 times more return on investment than ALR Technologies. However, Magnite is 5.04 times less risky than ALR Technologies. It trades about -0.07 of its potential returns per unit of risk. ALR Technologies is currently generating about -0.26 per unit of risk. If you would invest 1,617 in Magnite on October 23, 2024 and sell it today you would lose (73.00) from holding Magnite or give up 4.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Magnite vs. ALR Technologies
Performance |
| Timeline |
| Magnite |
| ALR Technologies |
Magnite and ALR Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and ALR Technologies
The main advantage of trading using opposite Magnite and ALR Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, ALR Technologies 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 ALR Technologies will offset losses from the drop in ALR Technologies' long position.| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
| ALR Technologies vs. Aurora Spine | ALR Technologies vs. Ainos Inc | ALR Technologies vs. Armm Inc | ALR Technologies vs. Cellink AB |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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