Correlation Between Magnora ASA and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Polar 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 Polar 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 Polar Capital Technology, you can compare the effects of market volatilities on Magnora ASA and Polar 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Polar Capital.
Diversification Opportunities for Magnora ASA and Polar Capital
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnora and Polar is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Magnora ASA i.e., Magnora ASA and Polar Capital go up and down completely randomly.
Pair Corralation between Magnora ASA and Polar Capital
Assuming the 90 days trading horizon Magnora ASA is expected to generate 3.43 times more return on investment than Polar Capital. However, Magnora ASA is 3.43 times more volatile than Polar Capital Technology. It trades about 0.04 of its potential returns per unit of risk. Polar Capital Technology is currently generating about 0.11 per unit of risk. If you would invest 1,819 in Magnora ASA on September 13, 2024 and sell it today you would earn a total of 686.00 from holding Magnora ASA or generate 37.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
Magnora ASA vs. Polar Capital Technology
Performance |
| Timeline |
| Magnora ASA |
| Polar Capital Technology |
Magnora ASA and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Polar Capital
The main advantage of trading using opposite Magnora ASA and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Polar 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Magnora ASA vs. Lowland Investment Co | Magnora ASA vs. Flow Traders NV | Magnora ASA vs. Auction Technology Group | Magnora ASA vs. Beeks Trading |
| Polar Capital vs. Catalyst Media Group | Polar Capital vs. CATLIN GROUP | Polar Capital vs. Tamburi Investment Partners | Polar Capital 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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