Correlation Between 893647BL0 and Magna International
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By analyzing existing cross correlation between TransDigm 55 percent and Magna International, you can compare the effects of market volatilities on 893647BL0 and Magna International 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 893647BL0 with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of 893647BL0 and Magna International.
Diversification Opportunities for 893647BL0 and Magna International
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 893647BL0 and Magna is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding TransDigm 55 percent and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and 893647BL0 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 TransDigm 55 percent are associated (or correlated) with Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of 893647BL0 i.e., 893647BL0 and Magna International go up and down completely randomly.
Pair Corralation between 893647BL0 and Magna International
Assuming the 90 days trading horizon TransDigm 55 percent is expected to under-perform the Magna International. But the bond apears to be less risky and, when comparing its historical volatility, TransDigm 55 percent is 1.27 times less risky than Magna International. The bond trades about -0.22 of its potential returns per unit of risk. The Magna International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,152 in Magna International on September 2, 2024 and sell it today you would earn a total of 362.00 from holding Magna International or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
TransDigm 55 percent vs. Magna International
Performance |
| Timeline |
| TransDigm 55 percent |
| Magna International |
893647BL0 and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 893647BL0 and Magna International
The main advantage of trading using opposite 893647BL0 and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 893647BL0 position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| 893647BL0 vs. Magna International | 893647BL0 vs. Western Union Co | 893647BL0 vs. Freedom Bank of | 893647BL0 vs. Rivian Automotive |
| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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