Correlation Between HomeToGo and MAGNUM DCORP

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both HomeToGo and MAGNUM DCORP 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 HomeToGo and MAGNUM DCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and MAGNUM DCORP INC, you can compare the effects of market volatilities on HomeToGo and MAGNUM DCORP 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 HomeToGo with a short position of MAGNUM DCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and MAGNUM DCORP.

Diversification Opportunities for HomeToGo and MAGNUM DCORP

HomeToGoMAGNUMDiversified AwayHomeToGoMAGNUMDiversified Away100%
-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between HomeToGo and MAGNUM is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and MAGNUM DCORP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNUM DCORP INC and HomeToGo 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 HomeToGo SE are associated (or correlated) with MAGNUM DCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNUM DCORP INC has no effect on the direction of HomeToGo i.e., HomeToGo and MAGNUM DCORP go up and down completely randomly.

Pair Corralation between HomeToGo and MAGNUM DCORP

Assuming the 90 days trading horizon HomeToGo is expected to generate 206.87 times less return on investment than MAGNUM DCORP. But when comparing it to its historical volatility, HomeToGo SE is 34.91 times less risky than MAGNUM DCORP. It trades about 0.03 of its potential returns per unit of risk. MAGNUM DCORP INC is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2.00  in MAGNUM DCORP INC on September 27, 2024 and sell it today you would earn a total of  1.89  from holding MAGNUM DCORP INC or generate 94.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

HomeToGo SE  vs.  MAGNUM DCORP INC

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50050100150200250
JavaScript chart by amCharts 3.21.15HTG 1CJB
       Timeline  
HomeToGo SE 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in HomeToGo SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, HomeToGo may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.81.922.12.22.32.4
MAGNUM DCORP INC 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MAGNUM DCORP INC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, MAGNUM DCORP reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.010.020.030.040.050.06

HomeToGo and MAGNUM DCORP Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.91-7.42-4.93-2.450.02.424.927.439.9312.43 0.010.020.030.04
JavaScript chart by amCharts 3.21.15HTG 1CJB
       Returns  

Pair Trading with HomeToGo and MAGNUM DCORP

The main advantage of trading using opposite HomeToGo and MAGNUM DCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo position performs unexpectedly, MAGNUM DCORP 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 MAGNUM DCORP will offset losses from the drop in MAGNUM DCORP's long position.
The idea behind HomeToGo SE and MAGNUM DCORP INC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments