Correlation Between Golden Metal and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both Golden Metal 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 Golden Metal and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and Magnora ASA, you can compare the effects of market volatilities on Golden Metal 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 Golden Metal with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Magnora ASA.
Diversification Opportunities for Golden Metal and Magnora ASA
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Magnora is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Golden Metal 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 Golden Metal Resources 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 Golden Metal i.e., Golden Metal and Magnora ASA go up and down completely randomly.
Pair Corralation between Golden Metal and Magnora ASA
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 1.39 times more return on investment than Magnora ASA. However, Golden Metal is 1.39 times more volatile than Magnora ASA. It trades about 0.32 of its potential returns per unit of risk. Magnora ASA is currently generating about -0.13 per unit of risk. If you would invest 2,800 in Golden Metal Resources on October 24, 2024 and sell it today you would earn a total of 400.00 from holding Golden Metal Resources or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Magnora ASA
Performance |
| Timeline |
| Golden Metal Resources |
| Magnora ASA |
Golden Metal and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Magnora ASA
The main advantage of trading using opposite Golden Metal and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal 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.| Golden Metal vs. Givaudan SA | Golden Metal vs. Atalaya Mining | Golden Metal vs. Central Asia Metals | Golden Metal vs. Metals Exploration Plc |
| Magnora ASA vs. Rheinmetall AG | Magnora ASA vs. Lundin Mining Corp | Magnora ASA vs. Golden Metal Resources | Magnora ASA vs. Pan American Silver |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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