Correlation Between Magnora ASA and Bonheur
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Bonheur 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 Magnora ASA and Bonheur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Bonheur, you can compare the effects of market volatilities on Magnora ASA and Bonheur 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 Magnora ASA with a short position of Bonheur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Bonheur.
Diversification Opportunities for Magnora ASA and Bonheur
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnora and Bonheur is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Bonheur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonheur and Magnora 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 Magnora ASA are associated (or correlated) with Bonheur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonheur has no effect on the direction of Magnora ASA i.e., Magnora ASA and Bonheur go up and down completely randomly.
Pair Corralation between Magnora ASA and Bonheur
Assuming the 90 days trading horizon Magnora ASA is expected to generate 1.71 times more return on investment than Bonheur. However, Magnora ASA is 1.71 times more volatile than Bonheur. It trades about 0.16 of its potential returns per unit of risk. Bonheur is currently generating about -0.13 per unit of risk. If you would invest 2,280 in Magnora ASA on August 29, 2024 and sell it today you would earn a total of 195.00 from holding Magnora ASA or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Bonheur
Performance |
| Timeline |
| Magnora ASA |
| Bonheur |
Magnora ASA and Bonheur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Bonheur
The main advantage of trading using opposite Magnora ASA and Bonheur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Bonheur 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 Bonheur will offset losses from the drop in Bonheur's long position.| Magnora ASA vs. Aker Horizons AS | Magnora ASA vs. REC Silicon ASA | Magnora ASA vs. Vow ASA | Magnora ASA vs. Saga Pure ASA |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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