Correlation Between Naturhouse Health and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both Naturhouse Health and Magnora ASA 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 Naturhouse Health and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturhouse Health SA and Magnora ASA, you can compare the effects of market volatilities on Naturhouse Health and Magnora ASA 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 Naturhouse Health with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturhouse Health and Magnora ASA.
Diversification Opportunities for Naturhouse Health and Magnora ASA
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Naturhouse and Magnora is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health SA and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Naturhouse Health 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 Naturhouse Health SA are associated (or correlated) with Magnora ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnora ASA has no effect on the direction of Naturhouse Health i.e., Naturhouse Health and Magnora ASA go up and down completely randomly.
Pair Corralation between Naturhouse Health and Magnora ASA
Assuming the 90 days trading horizon Naturhouse Health SA is expected to generate 0.78 times more return on investment than Magnora ASA. However, Naturhouse Health SA is 1.29 times less risky than Magnora ASA. It trades about 0.11 of its potential returns per unit of risk. Magnora ASA is currently generating about -0.11 per unit of risk. If you would invest 167.00 in Naturhouse Health SA on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Naturhouse Health SA or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Naturhouse Health SA vs. Magnora ASA
Performance |
| Timeline |
| Naturhouse Health |
| Magnora ASA |
Naturhouse Health and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturhouse Health and Magnora ASA
The main advantage of trading using opposite Naturhouse Health and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse Health position performs unexpectedly, Magnora ASA 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 Magnora ASA will offset losses from the drop in Magnora ASA's long position.| Naturhouse Health vs. AMG Advanced Metallurgical | Naturhouse Health vs. Rheinmetall AG | Naturhouse Health vs. GoldMining | Naturhouse Health vs. UNIQA Insurance Group |
| 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 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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