Correlation Between Magnora ASA and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Omega Healthcare 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 Omega Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Omega Healthcare Investors, you can compare the effects of market volatilities on Magnora ASA and Omega Healthcare 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 Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Omega Healthcare.
Diversification Opportunities for Magnora ASA and Omega Healthcare
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnora and Omega is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv 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 Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Magnora ASA i.e., Magnora ASA and Omega Healthcare go up and down completely randomly.
Pair Corralation between Magnora ASA and Omega Healthcare
Assuming the 90 days trading horizon Magnora ASA is expected to generate 1.81 times more return on investment than Omega Healthcare. However, Magnora ASA is 1.81 times more volatile than Omega Healthcare Investors. It trades about 0.18 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.06 per unit of risk. If you would invest 2,245 in Magnora ASA on September 4, 2024 and sell it today you would earn a total of 205.00 from holding Magnora ASA or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Omega Healthcare Investors
Performance |
| Timeline |
| Magnora ASA |
| Omega Healthcare Inv |
Magnora ASA and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Omega Healthcare
The main advantage of trading using opposite Magnora ASA and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.| Magnora ASA vs. Samsung Electronics Co | Magnora ASA vs. Samsung Electronics Co | Magnora ASA vs. Hyundai Motor | Magnora ASA vs. Toyota Motor Corp |
| Omega Healthcare vs. Flow Traders NV | Omega Healthcare vs. Molson Coors Beverage | Omega Healthcare vs. Ebro Foods | Omega Healthcare vs. Premier Foods PLC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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