Correlation Between Compal Electronics and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both Compal Electronics 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 Compal Electronics and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics GDR and Magnora ASA, you can compare the effects of market volatilities on Compal Electronics 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 Compal Electronics with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Magnora ASA.
Diversification Opportunities for Compal Electronics and Magnora ASA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Magnora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Compal Electronics 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 Compal Electronics GDR 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 Compal Electronics i.e., Compal Electronics and Magnora ASA go up and down completely randomly.
Pair Corralation between Compal Electronics and Magnora ASA
Assuming the 90 days trading horizon Compal Electronics is expected to generate 6.43 times less return on investment than Magnora ASA. But when comparing it to its historical volatility, Compal Electronics GDR is 2.27 times less risky than Magnora ASA. It trades about 0.01 of its potential returns per unit of risk. Magnora ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,769 in Magnora ASA on September 19, 2024 and sell it today you would earn a total of 871.00 from holding Magnora ASA or generate 49.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.99% |
| Values | Daily Returns |
Compal Electronics GDR vs. Magnora ASA
Performance |
| Timeline |
| Compal Electronics GDR |
| Magnora ASA |
Compal Electronics and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Magnora ASA
The main advantage of trading using opposite Compal Electronics and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics 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.| Compal Electronics vs. Hyundai Motor | Compal Electronics vs. Toyota Motor Corp | Compal Electronics vs. SoftBank Group Corp | Compal Electronics vs. Halyk Bank of |
| Magnora ASA vs. Alior Bank SA | Magnora ASA vs. Compal Electronics GDR | Magnora ASA vs. Ally Financial | Magnora ASA vs. Bellevue Healthcare Trust |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |