Correlation Between Magnora ASA and Broadcom
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Broadcom 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 Broadcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Broadcom, you can compare the effects of market volatilities on Magnora ASA and Broadcom 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 Broadcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Broadcom.
Diversification Opportunities for Magnora ASA and Broadcom
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnora and Broadcom is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom 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 Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Magnora ASA i.e., Magnora ASA and Broadcom go up and down completely randomly.
Pair Corralation between Magnora ASA and Broadcom
Assuming the 90 days trading horizon Magnora ASA is expected to generate 1.17 times more return on investment than Broadcom. However, Magnora ASA is 1.17 times more volatile than Broadcom. It trades about 0.23 of its potential returns per unit of risk. Broadcom is currently generating about -0.1 per unit of risk. If you would invest 2,245 in Magnora ASA on September 3, 2024 and sell it today you would earn a total of 260.00 from holding Magnora ASA or generate 11.58% 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. Broadcom
Performance |
| Timeline |
| Magnora ASA |
| Broadcom |
Magnora ASA and Broadcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Broadcom
The main advantage of trading using opposite Magnora ASA and Broadcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Broadcom 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 Broadcom will offset losses from the drop in Broadcom'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 |
| Broadcom vs. Catalyst Media Group | Broadcom vs. CATLIN GROUP | Broadcom vs. Magnora ASA | Broadcom 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |