Correlation Between Magnora ASA and Monks Investment
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Monks Investment 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 Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Monks Investment Trust, you can compare the effects of market volatilities on Magnora ASA and Monks Investment 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 Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Monks Investment.
Diversification Opportunities for Magnora ASA and Monks Investment
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnora and Monks is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust 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 Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of Magnora ASA i.e., Magnora ASA and Monks Investment go up and down completely randomly.
Pair Corralation between Magnora ASA and Monks Investment
Assuming the 90 days trading horizon Magnora ASA is expected to generate 6.31 times more return on investment than Monks Investment. However, Magnora ASA is 6.31 times more volatile than Monks Investment Trust. It trades about 0.02 of its potential returns per unit of risk. Monks Investment Trust is currently generating about 0.09 per unit of risk. If you would invest 2,774 in Magnora ASA on September 14, 2024 and sell it today you would lose (269.00) from holding Magnora ASA or give up 9.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Monks Investment Trust
Performance |
| Timeline |
| Magnora ASA |
| Monks Investment Trust |
Magnora ASA and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Monks Investment
The main advantage of trading using opposite Magnora ASA and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment'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 |
| Monks Investment vs. Fevertree Drinks Plc | Monks Investment vs. AfriTin Mining | Monks Investment vs. GoldMining | Monks Investment vs. Griffin Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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