Correlation Between Magnora ASA and Cadeler As
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Cadeler As 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 Cadeler As into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Cadeler As, you can compare the effects of market volatilities on Magnora ASA and Cadeler As 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 Cadeler As. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Cadeler As.
Diversification Opportunities for Magnora ASA and Cadeler As
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnora and Cadeler is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Cadeler As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler As 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 Cadeler As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler As has no effect on the direction of Magnora ASA i.e., Magnora ASA and Cadeler As go up and down completely randomly.
Pair Corralation between Magnora ASA and Cadeler As
Assuming the 90 days trading horizon Magnora ASA is expected to generate 1.6 times more return on investment than Cadeler As. However, Magnora ASA is 1.6 times more volatile than Cadeler As. It trades about 0.19 of its potential returns per unit of risk. Cadeler As is currently generating about -0.29 per unit of risk. If you would invest 2,240 in Magnora ASA on August 25, 2024 and sell it today you would earn a total of 250.00 from holding Magnora ASA or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Magnora ASA vs. Cadeler As
Performance |
| Timeline |
| Magnora ASA |
| Cadeler As |
Magnora ASA and Cadeler As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Cadeler As
The main advantage of trading using opposite Magnora ASA and Cadeler As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Cadeler As 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 Cadeler As will offset losses from the drop in Cadeler As' 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 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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