Correlation Between Magnite and Dentsu
Can any of the company-specific risk be diversified away by investing in both Magnite and Dentsu 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 Dentsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Dentsu Inc ADR, you can compare the effects of market volatilities on Magnite and Dentsu 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 Dentsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Dentsu.
Diversification Opportunities for Magnite and Dentsu
Pay attention - limited upside
The 3 months correlation between Magnite and Dentsu is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Dentsu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsu Inc ADR 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 Dentsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dentsu Inc ADR has no effect on the direction of Magnite i.e., Magnite and Dentsu go up and down completely randomly.
Pair Corralation between Magnite and Dentsu
Given the investment horizon of 90 days Magnite is expected to generate 2.16 times more return on investment than Dentsu. However, Magnite is 2.16 times more volatile than Dentsu Inc ADR. It trades about -0.03 of its potential returns per unit of risk. Dentsu Inc ADR is currently generating about -0.13 per unit of risk. If you would invest 1,617 in Magnite on October 23, 2024 and sell it today you would lose (42.00) from holding Magnite or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Magnite vs. Dentsu Inc ADR
Performance |
| Timeline |
| Magnite |
| Dentsu Inc ADR |
Magnite and Dentsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and Dentsu
The main advantage of trading using opposite Magnite and Dentsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, Dentsu 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 Dentsu will offset losses from the drop in Dentsu's long position.| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |