Correlation Between Magna Terra and ExGen Resources
Can any of the company-specific risk be diversified away by investing in both Magna Terra and ExGen Resources 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 Magna Terra and ExGen Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna Terra Minerals and ExGen Resources, you can compare the effects of market volatilities on Magna Terra and ExGen Resources 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 Magna Terra with a short position of ExGen Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna Terra and ExGen Resources.
Diversification Opportunities for Magna Terra and ExGen Resources
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magna and ExGen is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Magna Terra Minerals and ExGen Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExGen Resources and Magna Terra 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 Magna Terra Minerals are associated (or correlated) with ExGen Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExGen Resources has no effect on the direction of Magna Terra i.e., Magna Terra and ExGen Resources go up and down completely randomly.
Pair Corralation between Magna Terra and ExGen Resources
Assuming the 90 days horizon Magna Terra Minerals is expected to generate 0.85 times more return on investment than ExGen Resources. However, Magna Terra Minerals is 1.18 times less risky than ExGen Resources. It trades about 0.13 of its potential returns per unit of risk. ExGen Resources is currently generating about -0.02 per unit of risk. If you would invest 6.00 in Magna Terra Minerals on November 27, 2024 and sell it today you would earn a total of 1.00 from holding Magna Terra Minerals or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magna Terra Minerals vs. ExGen Resources
Performance |
| Timeline |
| Magna Terra Minerals |
| ExGen Resources |
Magna Terra and ExGen Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna Terra and ExGen Resources
The main advantage of trading using opposite Magna Terra and ExGen Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna Terra position performs unexpectedly, ExGen Resources 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 ExGen Resources will offset losses from the drop in ExGen Resources' long position.| Magna Terra vs. Wildsky Resources | Magna Terra vs. Golden Pursuit Resources | Magna Terra vs. ExGen Resources | Magna Terra vs. Fidelity Minerals Corp |
| ExGen Resources vs. Flow Beverage Corp | ExGen Resources vs. Renoworks Software | ExGen Resources vs. Farstarcap Investment Corp | ExGen Resources vs. Applied Materials, |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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