Correlation Between Magnite and Innovative Industrial
Can any of the company-specific risk be diversified away by investing in both Magnite and Innovative Industrial 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 Magnite and Innovative Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Innovative Industrial Properties, you can compare the effects of market volatilities on Magnite and Innovative Industrial 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 Magnite with a short position of Innovative Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Innovative Industrial.
Diversification Opportunities for Magnite and Innovative Industrial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magnite and Innovative is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Innovative Industrial Properti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Industrial and Magnite 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 Magnite are associated (or correlated) with Innovative Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Industrial has no effect on the direction of Magnite i.e., Magnite and Innovative Industrial go up and down completely randomly.
Pair Corralation between Magnite and Innovative Industrial
Given the investment horizon of 90 days Magnite is expected to generate 4.55 times more return on investment than Innovative Industrial. However, Magnite is 4.55 times more volatile than Innovative Industrial Properties. It trades about 0.12 of its potential returns per unit of risk. Innovative Industrial Properties is currently generating about -0.1 per unit of risk. If you would invest 1,300 in Magnite on September 25, 2024 and sell it today you would earn a total of 342.00 from holding Magnite or generate 26.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.88% |
Values | Daily Returns |
Magnite vs. Innovative Industrial Properti
Performance |
Timeline |
Magnite |
Innovative Industrial |
Magnite and Innovative Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Magnite and Innovative Industrial
The main advantage of trading using opposite Magnite and Innovative Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, Innovative Industrial 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 Innovative Industrial will offset losses from the drop in Innovative Industrial's long position.Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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