Correlation Between Magnora ASA and Verizon Communications
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Verizon Communications 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 Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Verizon Communications, you can compare the effects of market volatilities on Magnora ASA and Verizon Communications 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 Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Verizon Communications.
Diversification Opportunities for Magnora ASA and Verizon Communications
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magnora and Verizon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Magnora ASA i.e., Magnora ASA and Verizon Communications go up and down completely randomly.
Pair Corralation between Magnora ASA and Verizon Communications
Assuming the 90 days trading horizon Magnora ASA is expected to under-perform the Verizon Communications. In addition to that, Magnora ASA is 1.09 times more volatile than Verizon Communications. It trades about -0.2 of its total potential returns per unit of risk. Verizon Communications is currently generating about 0.01 per unit of volatility. If you would invest 3,953 in Verizon Communications on October 29, 2024 and sell it today you would earn a total of 2.00 from holding Verizon Communications or generate 0.05% 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. Verizon Communications
Performance |
| Timeline |
| Magnora ASA |
| Verizon Communications |
Magnora ASA and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Verizon Communications
The main advantage of trading using opposite Magnora ASA and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| Magnora ASA vs. Martin Marietta Materials | Magnora ASA vs. Mobius Investment Trust | Magnora ASA vs. Summit Materials Cl | Magnora ASA vs. Molson Coors Beverage |
| Verizon Communications vs. Tatton Asset Management | Verizon Communications vs. Games Workshop Group | Verizon Communications vs. Waste Management | Verizon Communications vs. Jupiter Fund Management |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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