Correlation Between Integral and Magnite

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

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

Diversification Opportunities for Integral and Magnite

-0.08

Correlation Coefficient

Integral  Magnite

Good diversification

The 3 months correlation between Integral and Magnite is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Magnite go up and down completely randomly.

Pair Corralation between Integral and Magnite

Considering the 90-day investment horizon Integral is expected to generate 2.05 times less return on investment than Magnite. But when comparing it to its historical volatility, Integral Ad Science is 1.17 times less risky than Magnite. It trades about 0.03 of its potential returns per unit of risk. Magnite is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  951.00  in Magnite on October 5, 2024 and sell it today you would earn a total of  659.00  from holding Magnite or generate 69.3% return on investment over 90 days.

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

Integral Ad Science  vs.  Magnite

Integral Ad Science

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Integral may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Magnite

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Magnite are ranked lower than 13 (%) 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 Integral and Magnite

The main advantage of trading using opposite Integral and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.