Correlation Between Magellan Financial and Oneview Healthcare

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

By analyzing existing cross correlation between Magellan Financial Group and Oneview Healthcare PLC, you can compare the effects of market volatilities on Magellan Financial and Oneview Healthcare 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 Magellan Financial with a short position of Oneview Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and Oneview Healthcare.

Diversification Opportunities for Magellan Financial and Oneview Healthcare

-0.21

Correlation Coefficient

Magellan Financial  Oneview Healthcare

Very good diversification

The 3 months correlation between Magellan and Oneview is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group and Oneview Healthcare PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oneview Healthcare PLC and Magellan Financial 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 Magellan Financial Group are associated (or correlated) with Oneview Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oneview Healthcare PLC has no effect on the direction of Magellan Financial i.e., Magellan Financial and Oneview Healthcare go up and down completely randomly.

Pair Corralation between Magellan Financial and Oneview Healthcare

Assuming the 90 days trading horizon Magellan Financial Group is expected to generate 0.87 times more return on investment than Oneview Healthcare. However, Magellan Financial Group is 1.15 times less risky than Oneview Healthcare. It trades about 0.06 of its potential returns per unit of risk. Oneview Healthcare PLC is currently generating about -0.07 per unit of risk. If you would invest  1,024  in Magellan Financial Group on October 6, 2024 and sell it today you would earn a total of  65.00  from holding Magellan Financial Group or generate 6.35% return on investment over 90 days.

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

Magellan Financial Group  vs.  Oneview Healthcare PLC

Magellan Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Magellan Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Magellan Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Oneview Healthcare PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oneview Healthcare PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Magellan Financial and Oneview Healthcare

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

The idea behind Magellan Financial Group and Oneview Healthcare PLC 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.