Correlation Between 55300RAB7 and Magnite

Can any of the company-specific risk be diversified away by investing in both 55300RAB7 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 55300RAB7 and Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MGM China Holdings and Magnite, you can compare the effects of market volatilities on 55300RAB7 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 55300RAB7 with a short position of Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of 55300RAB7 and Magnite.

Diversification Opportunities for 55300RAB7 and Magnite

-0.2

Correlation Coefficient

55300RAB7  Magnite

Good diversification

The 3 months correlation between 55300RAB7 and Magnite is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MGM China Holdings and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and 55300RAB7 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 MGM China 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 55300RAB7 i.e., 55300RAB7 and Magnite go up and down completely randomly.

Pair Corralation between 55300RAB7 and Magnite

Assuming the 90 days trading horizon MGM China Holdings is expected to under-perform the Magnite. But the bond apears to be less risky and, when comparing its historical volatility, MGM China Holdings is 9.49 times less risky than Magnite. The bond trades about -0.23 of its potential returns per unit of risk. The Magnite is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,630  in Magnite on September 13, 2024 and sell it today you would earn a total of  60.00  from holding Magnite or generate 3.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.14%
Values	Daily Returns

MGM China Holdings  vs.  Magnite

MGM China Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MGM China Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 55300RAB7 is not utilizing all of its potentials. The recent stock price disturbance, 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 55300RAB7 and Magnite

The main advantage of trading using opposite 55300RAB7 and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 55300RAB7 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 MGM China 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.