Correlation Between Magnora ASA and Henderson High
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Henderson High 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 Henderson High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Henderson High Income, you can compare the effects of market volatilities on Magnora ASA and Henderson High 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 Henderson High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Henderson High.
Diversification Opportunities for Magnora ASA and Henderson High
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnora and Henderson is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Henderson High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson High Income 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 Henderson High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson High Income has no effect on the direction of Magnora ASA i.e., Magnora ASA and Henderson High go up and down completely randomly.
Pair Corralation between Magnora ASA and Henderson High
Assuming the 90 days trading horizon Magnora ASA is expected to generate 2.35 times more return on investment than Henderson High. However, Magnora ASA is 2.35 times more volatile than Henderson High Income. It trades about 0.08 of its potential returns per unit of risk. Henderson High Income is currently generating about -0.01 per unit of risk. If you would invest 2,346 in Magnora ASA on October 24, 2024 and sell it today you would earn a total of 299.00 from holding Magnora ASA or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Henderson High Income
Performance |
| Timeline |
| Magnora ASA |
| Henderson High Income |
Magnora ASA and Henderson High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Henderson High
The main advantage of trading using opposite Magnora ASA and Henderson High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Henderson High 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 Henderson High will offset losses from the drop in Henderson High's long position.| Magnora ASA vs. Rheinmetall AG | Magnora ASA vs. Lundin Mining Corp | Magnora ASA vs. Golden Metal Resources | Magnora ASA vs. Pan American Silver |
| Henderson High vs. Catalyst Media Group | Henderson High vs. CATLIN GROUP | Henderson High vs. Tamburi Investment Partners | Henderson High vs. Magnora ASA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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