Correlation Between Magnite and Pinterest
Can any of the company-specific risk be diversified away by investing in both Magnite and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Pinterest, you can compare the effects of market volatilities on Magnite and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Pinterest.
Diversification Opportunities for Magnite and Pinterest
Very good diversification
The 3 months correlation between Magnite and Pinterest is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Magnite i.e., Magnite and Pinterest go up and down completely randomly.
Pair Corralation between Magnite and Pinterest
Given the investment horizon of 90 days Magnite is expected to generate 1.41 times more return on investment than Pinterest. However, Magnite is 1.41 times more volatile than Pinterest. It trades about 0.08 of its potential returns per unit of risk. Pinterest is currently generating about -0.02 per unit of risk. If you would invest 921.00 in Magnite on November 3, 2024 and sell it today you would earn a total of 799.00 from holding Magnite or generate 86.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnite vs. Pinterest
Performance |
| Timeline |
| Magnite |
Magnite and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and Pinterest
The main advantage of trading using opposite Magnite and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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