Correlation Between Magnora ASA and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Zegona Communications 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 Zegona Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Zegona Communications Plc, you can compare the effects of market volatilities on Magnora ASA and Zegona Communications 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 Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Zegona Communications.
Diversification Opportunities for Magnora ASA and Zegona Communications
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnora and Zegona is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications 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 Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Magnora ASA i.e., Magnora ASA and Zegona Communications go up and down completely randomly.
Pair Corralation between Magnora ASA and Zegona Communications
Assuming the 90 days trading horizon Magnora ASA is expected to generate 2.97 times less return on investment than Zegona Communications. But when comparing it to its historical volatility, Magnora ASA is 1.12 times less risky than Zegona Communications. It trades about 0.04 of its potential returns per unit of risk. Zegona Communications Plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 30,800 in Zegona Communications Plc on September 13, 2024 and sell it today you would earn a total of 1,600 from holding Zegona Communications Plc or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Zegona Communications Plc
Performance |
| Timeline |
| Magnora ASA |
| Zegona Communications Plc |
Magnora ASA and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Zegona Communications
The main advantage of trading using opposite Magnora ASA and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' 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 |
| Zegona Communications vs. Bloomsbury Publishing Plc | Zegona Communications vs. Solstad Offshore ASA | Zegona Communications vs. Vienna Insurance Group | Zegona Communications vs. Verizon Communications |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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