Correlation Between Magnite and ZW Data
Can any of the company-specific risk be diversified away by investing in both Magnite and ZW Data 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 ZW Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and ZW Data Action, you can compare the effects of market volatilities on Magnite and ZW Data 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 ZW Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and ZW Data.
Diversification Opportunities for Magnite and ZW Data
Very good diversification
The 3 months correlation between Magnite and CNET is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and ZW Data Action in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZW Data Action 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 ZW Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZW Data Action has no effect on the direction of Magnite i.e., Magnite and ZW Data go up and down completely randomly.
Pair Corralation between Magnite and ZW Data
Given the investment horizon of 90 days Magnite is expected to generate 0.53 times more return on investment than ZW Data. However, Magnite is 1.88 times less risky than ZW Data. It trades about 0.13 of its potential returns per unit of risk. ZW Data Action is currently generating about -0.27 per unit of risk. If you would invest 1,385 in Magnite on August 30, 2024 and sell it today you would earn a total of 277.00 from holding Magnite or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Magnite vs. ZW Data Action
Performance |
| Timeline |
| Magnite |
| ZW Data Action |
Magnite and ZW Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and ZW Data
The main advantage of trading using opposite Magnite and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, ZW Data 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 ZW Data will offset losses from the drop in ZW Data's long position.| Magnite vs. Capital Income Builder | Magnite vs. Direxion Daily FTSE | Magnite vs. Dodge Global Stock | Magnite vs. Collegium Pharmaceutical |
| ZW Data vs. Capital Income Builder | ZW Data vs. Direxion Daily FTSE | ZW Data vs. Dodge Global Stock | ZW Data vs. Collegium Pharmaceutical |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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