Correlation Between Charter Communications and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both Charter Communications and Magnora ASA 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 Charter Communications and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications Cl and Magnora ASA, you can compare the effects of market volatilities on Charter Communications and Magnora ASA 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 Charter Communications with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Magnora ASA.
Diversification Opportunities for Charter Communications and Magnora ASA
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Magnora is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications Cl and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Charter Communications 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 Charter Communications Cl are associated (or correlated) with Magnora ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnora ASA has no effect on the direction of Charter Communications i.e., Charter Communications and Magnora ASA go up and down completely randomly.
Pair Corralation between Charter Communications and Magnora ASA
Assuming the 90 days trading horizon Charter Communications is expected to generate 131.18 times less return on investment than Magnora ASA. But when comparing it to its historical volatility, Charter Communications Cl is 2.32 times less risky than Magnora ASA. It trades about 0.0 of its potential returns per unit of risk. Magnora ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,740 in Magnora ASA on September 15, 2024 and sell it today you would lose (145.00) from holding Magnora ASA or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.91% |
| Values | Daily Returns |
Charter Communications Cl vs. Magnora ASA
Performance |
| Timeline |
| Charter Communications |
| Magnora ASA |
Charter Communications and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Magnora ASA
The main advantage of trading using opposite Charter Communications and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications position performs unexpectedly, Magnora ASA 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 Magnora ASA will offset losses from the drop in Magnora ASA's long position.| Charter Communications vs. Samsung Electronics Co | Charter Communications vs. Samsung Electronics Co | Charter Communications vs. Hyundai Motor | Charter Communications vs. Reliance Industries Ltd |
| Magnora ASA vs. Team Internet Group | Magnora ASA vs. Charter Communications Cl | Magnora ASA vs. Diversified Energy | Magnora ASA vs. Monster Beverage Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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