Correlation Between Dno ASA and Magna International
Can any of the company-specific risk be diversified away by investing in both Dno ASA and Magna International 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 Dno ASA and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dno ASA and Magna International, you can compare the effects of market volatilities on Dno ASA and Magna International 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 Dno ASA with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Magna International.
Diversification Opportunities for Dno ASA and Magna International
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dno and Magna is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and Dno 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 Dno ASA are associated (or correlated) with Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Dno ASA i.e., Dno ASA and Magna International go up and down completely randomly.
Pair Corralation between Dno ASA and Magna International
Assuming the 90 days horizon Dno ASA is expected to under-perform the Magna International. In addition to that, Dno ASA is 1.05 times more volatile than Magna International. It trades about -0.09 of its total potential returns per unit of risk. Magna International is currently generating about 0.1 per unit of volatility. If you would invest 4,054 in Magna International on September 12, 2024 and sell it today you would earn a total of 176.00 from holding Magna International or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dno ASA vs. Magna International
Performance |
| Timeline |
| Dno ASA |
| Magna International |
Dno ASA and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dno ASA and Magna International
The main advantage of trading using opposite Dno ASA and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dno ASA position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| Dno ASA vs. Harmony Gold Mining | Dno ASA vs. Materialise NV | Dno ASA vs. Eagle Materials | Dno ASA vs. Plastic Omnium |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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