Correlation Between Islet Holdings and Magnite

Can any of the company-specific risk be diversified away by investing in both Islet Holdings and Magnite 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 Islet Holdings and Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Islet Holdings and Magnite, you can compare the effects of market volatilities on Islet Holdings and Magnite 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 Islet Holdings with a short position of Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Islet Holdings and Magnite.

Diversification Opportunities for Islet Holdings and Magnite

0.0

Correlation Coefficient

Islet Holdings  Magnite

Pay attention - limited upside

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

Pair Corralation between Islet Holdings and Magnite

If you would invest  1,330  in Magnite on September 18, 2024 and sell it today you would earn a total of  327.00  from holding Magnite or generate 24.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Islet Holdings  vs.  Magnite

Islet Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Islet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Islet Holdings is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Magnite

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Magnite are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Magnite demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Islet Holdings and Magnite

The main advantage of trading using opposite Islet Holdings and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Islet Holdings position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite's long position.

The idea behind Islet Holdings and Magnite 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.