Correlation Between Tigers Realm and Magellan Financial
Can any of the company-specific risk be diversified away by investing in both Tigers Realm and Magellan Financial 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 Tigers Realm and Magellan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tigers Realm Coal and Magellan Financial Group, you can compare the effects of market volatilities on Tigers Realm and Magellan Financial 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 Tigers Realm with a short position of Magellan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tigers Realm and Magellan Financial.
Diversification Opportunities for Tigers Realm and Magellan Financial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tigers and Magellan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tigers Realm Coal and Magellan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Financial and Tigers Realm 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 Tigers Realm Coal are associated (or correlated) with Magellan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Financial has no effect on the direction of Tigers Realm i.e., Tigers Realm and Magellan Financial go up and down completely randomly.
Pair Corralation between Tigers Realm and Magellan Financial
Assuming the 90 days trading horizon Tigers Realm Coal is expected to generate 3.74 times more return on investment than Magellan Financial. However, Tigers Realm is 3.74 times more volatile than Magellan Financial Group. It trades about 0.02 of its potential returns per unit of risk. Magellan Financial Group is currently generating about 0.05 per unit of risk. If you would invest 1.30 in Tigers Realm Coal on November 2, 2024 and sell it today you would lose (1.00) from holding Tigers Realm Coal or give up 76.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tigers Realm Coal vs. Magellan Financial Group
Performance |
| Timeline |
| Tigers Realm Coal |
| Magellan Financial |
Tigers Realm and Magellan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tigers Realm and Magellan Financial
The main advantage of trading using opposite Tigers Realm and Magellan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tigers Realm position performs unexpectedly, Magellan Financial 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 Magellan Financial will offset losses from the drop in Magellan Financial's long position.| Tigers Realm vs. Black Rock Mining | Tigers Realm vs. Super Retail Group | Tigers Realm vs. Diversified United Investment | Tigers Realm vs. Qbe Insurance Group |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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