Correlation Between Magnora ASA and Carasent ASA
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Carasent 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 Magnora ASA and Carasent ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Carasent ASA, you can compare the effects of market volatilities on Magnora ASA and Carasent 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 Magnora ASA with a short position of Carasent ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Carasent ASA.
Diversification Opportunities for Magnora ASA and Carasent ASA
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magnora and Carasent is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Carasent ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carasent ASA 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 Carasent ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carasent ASA has no effect on the direction of Magnora ASA i.e., Magnora ASA and Carasent ASA go up and down completely randomly.
Pair Corralation between Magnora ASA and Carasent ASA
Assuming the 90 days trading horizon Magnora ASA is expected to generate 1.17 times less return on investment than Carasent ASA. But when comparing it to its historical volatility, Magnora ASA is 1.6 times less risky than Carasent ASA. It trades about 0.05 of its potential returns per unit of risk. Carasent ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Carasent ASA on September 3, 2024 and sell it today you would earn a total of 685.00 from holding Carasent ASA or generate 49.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Carasent ASA
Performance |
| Timeline |
| Magnora ASA |
| Carasent ASA |
Magnora ASA and Carasent ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Carasent ASA
The main advantage of trading using opposite Magnora ASA and Carasent ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Carasent 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 Carasent ASA will offset losses from the drop in Carasent ASA'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 |
| Carasent ASA vs. Arcticzymes Technologies ASA | Carasent ASA vs. Smart Eye AB | Carasent ASA vs. Bergenbio ASA | Carasent ASA vs. Kitron 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 CEOs Directory module to screen CEOs from public companies around the world.
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