Correlation Between Magnis Energy and Exro Technologies

Can any of the company-specific risk be diversified away by investing in both Magnis Energy and Exro Technologies 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 Exro Technologies 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 Exro Technologies, you can compare the effects of market volatilities on Magnis Energy and Exro Technologies 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 Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnis Energy and Exro Technologies.

Diversification Opportunities for Magnis Energy and Exro Technologies

-0.73

Correlation Coefficient

Magnis Energy  Exro Technologies

Pay attention - limited upside

The 3 months correlation between Magnis and Exro is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Magnis Energy Technologies and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Magnis Energy i.e., Magnis Energy and Exro Technologies go up and down completely randomly.

Pair Corralation between Magnis Energy and Exro Technologies

Assuming the 90 days horizon Magnis Energy Technologies is expected to generate 2.46 times more return on investment than Exro Technologies. However, Magnis Energy is 2.46 times more volatile than Exro Technologies. It trades about 0.1 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.03 per unit of risk. If you would invest  2.50  in Magnis Energy Technologies on December 28, 2024 and sell it today you would earn a total of  0.65  from holding Magnis Energy Technologies or generate 26.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Magnis Energy Technologies  vs.  Exro Technologies

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 7 (%) 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.

Exro Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exro Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Magnis Energy and Exro Technologies

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

The idea behind Magnis Energy Technologies and Exro Technologies 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.