Correlation Between Magnora ASA and River
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and River 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 River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and River and Mercantile, you can compare the effects of market volatilities on Magnora ASA and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and River.
Diversification Opportunities for Magnora ASA and River
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnora and River is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Magnora ASA i.e., Magnora ASA and River go up and down completely randomly.
Pair Corralation between Magnora ASA and River
Assuming the 90 days trading horizon Magnora ASA is expected to generate 4.02 times more return on investment than River. However, Magnora ASA is 4.02 times more volatile than River and Mercantile. It trades about 0.03 of its potential returns per unit of risk. River and Mercantile is currently generating about 0.04 per unit of risk. If you would invest 2,295 in Magnora ASA on September 19, 2024 and sell it today you would earn a total of 345.00 from holding Magnora ASA or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.5% |
| Values | Daily Returns |
Magnora ASA vs. River and Mercantile
Performance |
| Timeline |
| Magnora ASA |
| River and Mercantile |
Magnora ASA and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and River
The main advantage of trading using opposite Magnora ASA and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| Magnora ASA vs. Alior Bank SA | Magnora ASA vs. Compal Electronics GDR | Magnora ASA vs. Ally Financial | Magnora ASA vs. Bellevue Healthcare Trust |
| River vs. Catalyst Media Group | River vs. CATLIN GROUP | River vs. Tamburi Investment Partners | River 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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