Correlation Between Magnora ASA and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Lindsell Train 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 Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Lindsell Train Investment, you can compare the effects of market volatilities on Magnora ASA and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Lindsell Train.
Diversification Opportunities for Magnora ASA and Lindsell Train
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnora and Lindsell is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Magnora ASA i.e., Magnora ASA and Lindsell Train go up and down completely randomly.
Pair Corralation between Magnora ASA and Lindsell Train
Assuming the 90 days trading horizon Magnora ASA is expected to generate 4.05 times more return on investment than Lindsell Train. However, Magnora ASA is 4.05 times more volatile than Lindsell Train Investment. It trades about 0.04 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.0 per unit of risk. If you would invest 2,394 in Magnora ASA on November 3, 2024 and sell it today you would earn a total of 261.00 from holding Magnora ASA or generate 10.9% 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. Lindsell Train Investment
Performance |
| Timeline |
| Magnora ASA |
| Lindsell Train Investment |
Magnora ASA and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Lindsell Train
The main advantage of trading using opposite Magnora ASA and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train'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 |
| Lindsell Train vs. Verizon Communications | Lindsell Train vs. Bloomsbury Publishing Plc | Lindsell Train vs. Gamma Communications PLC | Lindsell Train vs. Auto Trader Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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