Correlation Between Magnora ASA and Schroders PLC
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Schroders PLC 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 Schroders PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Schroders PLC, you can compare the effects of market volatilities on Magnora ASA and Schroders PLC 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 Schroders PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Schroders PLC.
Diversification Opportunities for Magnora ASA and Schroders PLC
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magnora and Schroders is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Schroders PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders PLC 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 Schroders PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders PLC has no effect on the direction of Magnora ASA i.e., Magnora ASA and Schroders PLC go up and down completely randomly.
Pair Corralation between Magnora ASA and Schroders PLC
Assuming the 90 days trading horizon Magnora ASA is expected to generate 0.8 times more return on investment than Schroders PLC. However, Magnora ASA is 1.25 times less risky than Schroders PLC. It trades about 0.1 of its potential returns per unit of risk. Schroders PLC is currently generating about -0.1 per unit of risk. If you would invest 2,316 in Magnora ASA on September 13, 2024 and sell it today you would earn a total of 189.00 from holding Magnora ASA or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Schroders PLC
Performance |
| Timeline |
| Magnora ASA |
| Schroders PLC |
Magnora ASA and Schroders PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Schroders PLC
The main advantage of trading using opposite Magnora ASA and Schroders PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Schroders PLC 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 Schroders PLC will offset losses from the drop in Schroders PLC'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 |
| Schroders PLC vs. Catalyst Media Group | Schroders PLC vs. CATLIN GROUP | Schroders PLC vs. Tamburi Investment Partners | Schroders PLC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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