Correlation Between American Vanguard and MagIndustries Corp

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

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

Diversification Opportunities for American Vanguard and MagIndustries Corp

0.0

Correlation Coefficient

American Vanguard  MagIndustries Corp

Pay attention - limited upside

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

Pair Corralation between American Vanguard and MagIndustries Corp

If you would invest  435.00  in American Vanguard on December 24, 2024 and sell it today you would earn a total of  19.00  from holding American Vanguard or generate 4.37% return on investment over 90 days.

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

American Vanguard  vs.  MagIndustries Corp

American Vanguard

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Vanguard are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, American Vanguard may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MagIndustries Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days MagIndustries Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, MagIndustries Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with American Vanguard and MagIndustries Corp

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

The idea behind American Vanguard and MagIndustries Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.