Correlation Between Magnora ASA and North American
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and North American 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 North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and The North American, you can compare the effects of market volatilities on Magnora ASA and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and North American.
Diversification Opportunities for Magnora ASA and North American
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnora and North is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and The North American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American has no effect on the direction of Magnora ASA i.e., Magnora ASA and North American go up and down completely randomly.
Pair Corralation between Magnora ASA and North American
Assuming the 90 days trading horizon Magnora ASA is expected to generate 5.49 times more return on investment than North American. However, Magnora ASA is 5.49 times more volatile than The North American. It trades about 0.04 of its potential returns per unit of risk. The North American is currently generating about 0.06 per unit of risk. If you would invest 2,019 in Magnora ASA on November 3, 2024 and sell it today you would earn a total of 636.00 from holding Magnora ASA or generate 31.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.91% |
| Values | Daily Returns |
Magnora ASA vs. The North American
Performance |
| Timeline |
| Magnora ASA |
| North American |
Magnora ASA and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and North American
The main advantage of trading using opposite Magnora ASA and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, North American 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 North American will offset losses from the drop in North American'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 |
| North American vs. Spirent Communications plc | North American vs. United States Steel | North American vs. Tata Steel Limited | North American vs. Naked Wines plc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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