Correlation Between Magna International and Simclar

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

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

Diversification Opportunities for Magna International and Simclar

-0.15

Correlation Coefficient

Magna International  Simclar

Good diversification

The 3 months correlation between Magna and Simclar is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Magna International and Simclar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simclar and Magna International 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 Magna International are associated (or correlated) with Simclar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simclar has no effect on the direction of Magna International i.e., Magna International and Simclar go up and down completely randomly.

Pair Corralation between Magna International and Simclar

If you would invest  4,206  in Magna International on July 12, 2025 and sell it today you would earn a total of  148.00  from holding Magna International or generate 3.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	17.19%
Values	Daily Returns

Magna International  vs.  Simclar

Magna International

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Magna International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Magna International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Simclar

Risk-Adjusted Performance

Weakest

Over the last 90 days Simclar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Simclar is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Magna International and Simclar

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

The idea behind Magna International and Simclar 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.