Correlation Between COMSovereign Holding and Magnite

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

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

Diversification Opportunities for COMSovereign Holding and Magnite

0.1

Correlation Coefficient

COMSovereign Holding  Magnite

Average diversification

The 3 months correlation between COMSovereign and Magnite is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding COMSovereign Holding Corp and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and COMSovereign Holding 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 COMSovereign Holding Corp 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 COMSovereign Holding i.e., COMSovereign Holding and Magnite go up and down completely randomly.

Pair Corralation between COMSovereign Holding and Magnite

Assuming the 90 days horizon COMSovereign Holding Corp is expected to generate 2.37 times more return on investment than Magnite. However, COMSovereign Holding is 2.37 times more volatile than Magnite. It trades about 0.08 of its potential returns per unit of risk. Magnite is currently generating about 0.04 per unit of risk. If you would invest  137.00  in COMSovereign Holding Corp on September 28, 2024 and sell it today you would earn a total of  78.00  from holding COMSovereign Holding Corp or generate 56.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	27.22%
Values	Daily Returns

COMSovereign Holding Corp  vs.  Magnite

COMSovereign Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COMSovereign Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, COMSovereign Holding is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail 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 weak basic indicators, Magnite demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COMSovereign Holding and Magnite

The main advantage of trading using opposite COMSovereign Holding and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMSovereign Holding 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 COMSovereign Holding Corp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.