Correlation Between Magnora ASA and Miton UK
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Miton UK 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 Miton UK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Miton UK MicroCap, you can compare the effects of market volatilities on Magnora ASA and Miton UK 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 Miton UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Miton UK.
Diversification Opportunities for Magnora ASA and Miton UK
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Magnora and Miton is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Miton UK MicroCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miton UK MicroCap 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 Miton UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miton UK MicroCap has no effect on the direction of Magnora ASA i.e., Magnora ASA and Miton UK go up and down completely randomly.
Pair Corralation between Magnora ASA and Miton UK
Assuming the 90 days trading horizon Magnora ASA is expected to generate 3.98 times more return on investment than Miton UK. However, Magnora ASA is 3.98 times more volatile than Miton UK MicroCap. It trades about 0.11 of its potential returns per unit of risk. Miton UK MicroCap is currently generating about 0.22 per unit of risk. If you would invest 2,395 in Magnora ASA on September 14, 2024 and sell it today you would earn a total of 110.00 from holding Magnora ASA or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Miton UK MicroCap
Performance |
| Timeline |
| Magnora ASA |
| Miton UK MicroCap |
Magnora ASA and Miton UK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Miton UK
The main advantage of trading using opposite Magnora ASA and Miton UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Miton UK 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 Miton UK will offset losses from the drop in Miton UK's long position.| Magnora ASA vs. Aurora Investment Trust | Magnora ASA vs. Fevertree Drinks Plc | Magnora ASA vs. Monster Beverage Corp | Magnora ASA vs. Hansa Investment |
| Miton UK vs. Catalyst Media Group | Miton UK vs. CATLIN GROUP | Miton UK vs. Tamburi Investment Partners | Miton UK 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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