Correlation Between Comcast Corp and Magna International

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

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

Diversification Opportunities for Comcast Corp and Magna International

0.72

Correlation Coefficient

Comcast Corp  Magna International

Poor diversification

The 3 months correlation between Comcast and Magna is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and Comcast Corp 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 Comcast Corp are associated (or correlated) with Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Comcast Corp i.e., Comcast Corp and Magna International go up and down completely randomly.

Pair Corralation between Comcast Corp and Magna International

Assuming the 90 days horizon Comcast Corp is expected to generate 0.64 times more return on investment than Magna International. However, Comcast Corp is 1.57 times less risky than Magna International. It trades about -0.36 of its potential returns per unit of risk. Magna International is currently generating about -0.41 per unit of risk. If you would invest  4,278  in Comcast Corp on January 20, 2024 and sell it today you would lose (316.00) from holding Comcast Corp or give up 7.39% of portfolio value over 90 days.

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

Comcast Corp  vs.  Magna International

Comcast Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comcast Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Magna International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Magna International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Comcast Corp and Magna International

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

The idea behind Comcast Corp and Magna International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.