Correlation Between Magnora ASA and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Cembra Money 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 Cembra Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Cembra Money Bank, you can compare the effects of market volatilities on Magnora ASA and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Cembra Money.
Diversification Opportunities for Magnora ASA and Cembra Money
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnora and Cembra is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Magnora ASA i.e., Magnora ASA and Cembra Money go up and down completely randomly.
Pair Corralation between Magnora ASA and Cembra Money
Assuming the 90 days trading horizon Magnora ASA is expected to generate 3.26 times more return on investment than Cembra Money. However, Magnora ASA is 3.26 times more volatile than Cembra Money Bank. It trades about 0.04 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.03 per unit of risk. If you would invest 1,823 in Magnora ASA on September 3, 2024 and sell it today you would earn a total of 682.00 from holding Magnora ASA or generate 37.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.81% |
| Values | Daily Returns |
Magnora ASA vs. Cembra Money Bank
Performance |
| Timeline |
| Magnora ASA |
| Cembra Money Bank |
Magnora ASA and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Cembra Money
The main advantage of trading using opposite Magnora ASA and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money'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 |
| Cembra Money vs. Catalyst Media Group | Cembra Money vs. CATLIN GROUP | Cembra Money vs. Magnora ASA | Cembra Money 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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