Correlation Between Magnite and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both Magnite and Croghan Bancshares 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 Croghan Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Croghan Bancshares, you can compare the effects of market volatilities on Magnite and Croghan Bancshares 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 Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Croghan Bancshares.
Diversification Opportunities for Magnite and Croghan Bancshares
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Magnite and Croghan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares 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 Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of Magnite i.e., Magnite and Croghan Bancshares go up and down completely randomly.
Pair Corralation between Magnite and Croghan Bancshares
Given the investment horizon of 90 days Magnite is expected to generate 4.85 times more return on investment than Croghan Bancshares. However, Magnite is 4.85 times more volatile than Croghan Bancshares. It trades about 0.06 of its potential returns per unit of risk. Croghan Bancshares is currently generating about 0.19 per unit of risk. If you would invest 1,630 in Magnite on September 13, 2024 and sell it today you would earn a total of 44.00 from holding Magnite or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Magnite vs. Croghan Bancshares
Performance |
| Timeline |
| Magnite |
| Croghan Bancshares |
Magnite and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and Croghan Bancshares
The main advantage of trading using opposite Magnite and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' long position.| Magnite vs. Mirriad Advertising plc | Magnite vs. INEO Tech Corp | Magnite vs. Kidoz Inc | Magnite vs. Marchex |
| Croghan Bancshares vs. Chester Mining | Croghan Bancshares vs. Inflection Point Acquisition | Croghan Bancshares vs. Forsys Metals Corp | Croghan Bancshares vs. Papaya Growth Opportunity |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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