Correlation Between Magnora ASA and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Litigation Capital 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 Litigation Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Litigation Capital Management, you can compare the effects of market volatilities on Magnora ASA and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Litigation Capital.
Diversification Opportunities for Magnora ASA and Litigation Capital
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Magnora and Litigation is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Magnora ASA i.e., Magnora ASA and Litigation Capital go up and down completely randomly.
Pair Corralation between Magnora ASA and Litigation Capital
Assuming the 90 days trading horizon Magnora ASA is expected to generate 0.7 times more return on investment than Litigation Capital. However, Magnora ASA is 1.42 times less risky than Litigation Capital. It trades about -0.11 of its potential returns per unit of risk. Litigation Capital Management is currently generating about -0.29 per unit of risk. If you would invest 2,780 in Magnora ASA on November 3, 2024 and sell it today you would lose (125.00) from holding Magnora ASA or give up 4.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Litigation Capital Management
Performance |
| Timeline |
| Magnora ASA |
| Litigation Capital |
Magnora ASA and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Litigation Capital
The main advantage of trading using opposite Magnora ASA and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Magnora ASA vs. Take Two Interactive Software | Magnora ASA vs. Aeorema Communications Plc | Magnora ASA vs. Dairy Farm International | Magnora ASA vs. MoneysupermarketCom Group PLC |
| Litigation Capital vs. Bankers Investment Trust | Litigation Capital vs. Dairy Farm International | Litigation Capital vs. Chrysalis Investments | Litigation Capital vs. Lowland Investment Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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