Correlation Between Magnora ASA and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Finnair Oyj 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 Magnora ASA and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Finnair Oyj, you can compare the effects of market volatilities on Magnora ASA and Finnair Oyj 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 Magnora ASA with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Finnair Oyj.
Diversification Opportunities for Magnora ASA and Finnair Oyj
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnora and Finnair is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Magnora ASA 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 Magnora ASA are associated (or correlated) with Finnair Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnair Oyj has no effect on the direction of Magnora ASA i.e., Magnora ASA and Finnair Oyj go up and down completely randomly.
Pair Corralation between Magnora ASA and Finnair Oyj
Assuming the 90 days trading horizon Magnora ASA is expected to generate 0.96 times more return on investment than Finnair Oyj. However, Magnora ASA is 1.04 times less risky than Finnair Oyj. It trades about 0.1 of its potential returns per unit of risk. Finnair Oyj is currently generating about -0.06 per unit of risk. If you would invest 2,237 in Magnora ASA on September 3, 2024 and sell it today you would earn a total of 268.00 from holding Magnora ASA or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Finnair Oyj
Performance |
| Timeline |
| Magnora ASA |
| Finnair Oyj |
Magnora ASA and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Finnair Oyj
The main advantage of trading using opposite Magnora ASA and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Finnair Oyj 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 Finnair Oyj will offset losses from the drop in Finnair Oyj's long position.| Magnora ASA vs. Catalyst Media Group | Magnora ASA vs. CATLIN GROUP | Magnora ASA vs. RTW Venture Fund | Magnora ASA vs. Secure Property Development |
| Finnair Oyj vs. Catalyst Media Group | Finnair Oyj vs. CATLIN GROUP | Finnair Oyj vs. Magnora ASA | Finnair Oyj vs. RTW Venture Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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