Correlation Between Magnite and Fluent

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

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

Diversification Opportunities for Magnite and Fluent

0.57

Correlation Coefficient

Magnite  Fluent

Very weak diversification

The 3 months correlation between Magnite and Fluent is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc and Magnite 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 Magnite are associated (or correlated) with Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of Magnite i.e., Magnite and Fluent go up and down completely randomly.

Pair Corralation between Magnite and Fluent

Given the investment horizon of 90 days Magnite is expected to under-perform the Fluent. In addition to that, Magnite is 1.12 times more volatile than Fluent Inc. It trades about -0.03 of its total potential returns per unit of risk. Fluent Inc is currently generating about 0.02 per unit of volatility. If you would invest  266.00  in Fluent Inc on December 2, 2024 and sell it today you would earn a total of  5.00  from holding Fluent Inc or generate 1.88% return on investment over 90 days.

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

Magnite  vs.  Fluent Inc

Magnite

Risk-Adjusted Performance

Very Weak

Over the last 90 days Magnite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Magnite is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Fluent Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Magnite and Fluent

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

The idea behind Magnite and Fluent 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.