Correlation Between Organic Sales and Magnite

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

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

Diversification Opportunities for Organic Sales and Magnite

0.0

Correlation Coefficient

Organic Sales  Magnite

Pay attention - limited upside

The 3 months correlation between Organic and Magnite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Organic Sales and and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Organic Sales 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 Organic Sales and 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 Organic Sales i.e., Organic Sales and Magnite go up and down completely randomly.

Pair Corralation between Organic Sales and Magnite

If you would invest  1,403  in Magnite on September 14, 2024 and sell it today you would earn a total of  241.00  from holding Magnite or generate 17.18% return on investment over 90 days.

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

Organic Sales and  vs.  Magnite

Organic Sales

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Organic Sales and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Organic Sales is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Magnite

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Magnite are ranked lower than 7 (%) 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 Organic Sales and Magnite

The main advantage of trading using opposite Organic Sales and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Organic Sales 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 Organic Sales and 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.