Correlation Between Auction Technology and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both Auction Technology 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 Auction Technology and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and Magnora ASA, you can compare the effects of market volatilities on Auction Technology 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 Auction Technology with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Magnora ASA.
Diversification Opportunities for Auction Technology and Magnora ASA
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auction and Magnora is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Auction Technology 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 Auction Technology Group 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 Auction Technology i.e., Auction Technology and Magnora ASA go up and down completely randomly.
Pair Corralation between Auction Technology and Magnora ASA
Assuming the 90 days trading horizon Auction Technology Group is expected to under-perform the Magnora ASA. But the stock apears to be less risky and, when comparing its historical volatility, Auction Technology Group is 1.63 times less risky than Magnora ASA. The stock trades about 0.0 of its potential returns per unit of risk. The Magnora ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,787 in Magnora ASA on September 14, 2024 and sell it today you would earn a total of 718.00 from holding Magnora ASA or generate 40.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.81% |
| Values | Daily Returns |
Auction Technology Group vs. Magnora ASA
Performance |
| Timeline |
| Auction Technology |
| Magnora ASA |
Auction Technology and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Magnora ASA
The main advantage of trading using opposite Auction Technology and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology 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.| Auction Technology vs. SupplyMe Capital PLC | Auction Technology vs. Lloyds Banking Group | Auction Technology vs. Premier African Minerals | Auction Technology vs. SANTANDER UK 8 |
| Magnora ASA vs. Aurora Investment Trust | Magnora ASA vs. Fevertree Drinks Plc | Magnora ASA vs. Monster Beverage Corp | Magnora ASA vs. Hansa Investment |
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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