Correlation Between Magnite and Romana Food

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Can any of the company-specific risk be diversified away by investing in both Magnite and Romana Food 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 Romana Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Romana Food Brands, you can compare the effects of market volatilities on Magnite and Romana Food 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 Romana Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Romana Food.

Diversification Opportunities for Magnite and Romana Food

MagniteRomanaDiversified AwayMagniteRomanaDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Magnite and Romana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Romana Food Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Romana Food Brands 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 Romana Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Romana Food Brands has no effect on the direction of Magnite i.e., Magnite and Romana Food go up and down completely randomly.

Pair Corralation between Magnite and Romana Food

If you would invest  1,642  in Magnite on November 23, 2024 and sell it today you would earn a total of  266.00  from holding Magnite or generate 16.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Magnite  vs.  Romana Food Brands

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015202530
JavaScript chart by amCharts 3.21.15MGNI RFBC
       Timeline  
Magnite 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Magnite are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Magnite may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb15161718192021
Romana Food Brands 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Romana Food Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Romana Food is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.00010.0001050.000110.000115

Magnite and Romana Food Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.87-7.4-4.92-2.440.04322.595.197.7810.38 0.010.020.030.04
JavaScript chart by amCharts 3.21.15MGNI RFBC
       Returns  

Pair Trading with Magnite and Romana Food

The main advantage of trading using opposite Magnite and Romana Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, Romana Food 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 Romana Food will offset losses from the drop in Romana Food's long position.
The idea behind Magnite and Romana Food Brands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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