Correlation Between Magnis Energy and Ilika Plc
Can any of the company-specific risk be diversified away by investing in both Magnis Energy and Ilika Plc 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 Magnis Energy and Ilika Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnis Energy Technologies and Ilika plc, you can compare the effects of market volatilities on Magnis Energy and Ilika Plc 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 Magnis Energy with a short position of Ilika Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnis Energy and Ilika Plc.
Diversification Opportunities for Magnis Energy and Ilika Plc
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnis and Ilika is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Magnis Energy Technologies and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc and Magnis Energy 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 Magnis Energy Technologies are associated (or correlated) with Ilika Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilika plc has no effect on the direction of Magnis Energy i.e., Magnis Energy and Ilika Plc go up and down completely randomly.
Pair Corralation between Magnis Energy and Ilika Plc
Assuming the 90 days horizon Magnis Energy Technologies is expected to generate 2.7 times more return on investment than Ilika Plc. However, Magnis Energy is 2.7 times more volatile than Ilika plc. It trades about 0.08 of its potential returns per unit of risk. Ilika plc is currently generating about 0.11 per unit of risk. If you would invest 3.00 in Magnis Energy Technologies on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Magnis Energy Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnis Energy Technologies vs. Ilika plc
Performance |
| Timeline |
| Magnis Energy Techno |
| Ilika plc |
Magnis Energy and Ilika Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnis Energy and Ilika Plc
The main advantage of trading using opposite Magnis Energy and Ilika Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnis Energy position performs unexpectedly, Ilika Plc 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 Ilika Plc will offset losses from the drop in Ilika Plc's long position.| Magnis Energy vs. FREYR Battery SA | Magnis Energy vs. nVent Electric PLC | Magnis Energy vs. Hubbell | Magnis Energy vs. Advanced Energy Industries |
| Ilika Plc vs. Novonix Ltd ADR | Ilika Plc vs. Magnis Energy Technologies | Ilika Plc vs. Exro Technologies | Ilika Plc vs. FuelPositive 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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