Correlation Between Magna Mining and Nano One

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

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

Diversification Opportunities for Magna Mining and Nano One

-0.62

Correlation Coefficient

Magna Mining  Nano One

Excellent diversification

The 3 months correlation between Magna and Nano is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Magna Mining and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials and Magna Mining 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 Mining are associated (or correlated) with Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Magna Mining i.e., Magna Mining and Nano One go up and down completely randomly.

Pair Corralation between Magna Mining and Nano One

Assuming the 90 days trading horizon Magna Mining is expected to under-perform the Nano One. But the stock apears to be less risky and, when comparing its historical volatility, Magna Mining is 1.54 times less risky than Nano One. The stock trades about -0.01 of its potential returns per unit of risk. The Nano One Materials is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  77.00  in Nano One Materials on September 27, 2024 and sell it today you would earn a total of  15.00  from holding Nano One Materials or generate 19.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Magna Mining  vs.  Nano One Materials

Magna Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Magna Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Magna Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Nano One Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nano One Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Magna Mining and Nano One

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

The idea behind Magna Mining and Nano One Materials 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.