Correlation Between Scienjoy Holding and Magnite

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

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

Diversification Opportunities for Scienjoy Holding and Magnite

0.26

Correlation Coefficient

Scienjoy Holding  Magnite

Modest diversification

The 3 months correlation between Scienjoy and Magnite is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Scienjoy Holding Corp and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite and Scienjoy Holding 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 Scienjoy Holding Corp 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 Scienjoy Holding i.e., Scienjoy Holding and Magnite go up and down completely randomly.

Pair Corralation between Scienjoy Holding and Magnite

Allowing for the 90-day total investment horizon Scienjoy Holding is expected to generate 1.18 times less return on investment than Magnite. In addition to that, Scienjoy Holding is 2.17 times more volatile than Magnite. It trades about 0.09 of its total potential returns per unit of risk. Magnite is currently generating about 0.23 per unit of volatility. If you would invest  1,250  in Magnite on October 6, 2024 and sell it today you would earn a total of  463.00  from holding Magnite or generate 37.04% return on investment over 90 days.

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

Scienjoy Holding Corp  vs.  Magnite

Scienjoy Holding Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Scienjoy Holding Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Scienjoy Holding revealed solid returns over the last few months and may actually be approaching a breakup point.

Magnite

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Magnite are ranked lower than 15 (%) 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 Scienjoy Holding and Magnite

The main advantage of trading using opposite Scienjoy Holding and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scienjoy Holding 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 Scienjoy Holding Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.