Correlation Between Magnora ASA and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and CATLIN GROUP 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 CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and CATLIN GROUP , you can compare the effects of market volatilities on Magnora ASA and CATLIN GROUP 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and CATLIN GROUP.
Diversification Opportunities for Magnora ASA and CATLIN GROUP
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Magnora and CATLIN is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Magnora ASA i.e., Magnora ASA and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Magnora ASA and CATLIN GROUP
Assuming the 90 days trading horizon Magnora ASA is expected to generate 1.05 times less return on investment than CATLIN GROUP. In addition to that, Magnora ASA is 3.3 times more volatile than CATLIN GROUP . It trades about 0.02 of its total potential returns per unit of risk. CATLIN GROUP is currently generating about 0.06 per unit of volatility. If you would invest 7,250 in CATLIN GROUP on August 26, 2024 and sell it today you would earn a total of 2,250 from holding CATLIN GROUP or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Magnora ASA vs. CATLIN GROUP
Performance |
| Timeline |
| Magnora ASA |
| CATLIN GROUP |
Magnora ASA and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and CATLIN GROUP
The main advantage of trading using opposite Magnora ASA and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP'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 |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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