Correlation Between Magnis Energy and Alfen NV

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

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

Diversification Opportunities for Magnis Energy and Alfen NV

0.0

Correlation Coefficient

Magnis Energy  Alfen NV

Pay attention - limited upside

The 3 months correlation between Magnis and Alfen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magnis Energy Technologies and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV and Magnis Energy 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 Magnis Energy Technologies are associated (or correlated) with Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of Magnis Energy i.e., Magnis Energy and Alfen NV go up and down completely randomly.

Pair Corralation between Magnis Energy and Alfen NV

If you would invest  2.00  in Magnis Energy Technologies on December 26, 2024 and sell it today you would earn a total of  1.30  from holding Magnis Energy Technologies or generate 65.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Magnis Energy Technologies  vs.  Alfen NV

Magnis Energy Techno

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Magnis Energy Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Magnis Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Alfen NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alfen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Alfen NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Magnis Energy and Alfen NV

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

The idea behind Magnis Energy Technologies and Alfen NV 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.