Correlation Between Magnora ASA and Idex ASA
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Idex 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 Idex 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 Idex ASA, you can compare the effects of market volatilities on Magnora ASA and Idex 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 Idex ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Idex ASA.
Diversification Opportunities for Magnora ASA and Idex ASA
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Magnora and Idex is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Idex ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idex 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 Idex ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idex ASA has no effect on the direction of Magnora ASA i.e., Magnora ASA and Idex ASA go up and down completely randomly.
Pair Corralation between Magnora ASA and Idex ASA
Assuming the 90 days trading horizon Magnora ASA is expected to generate 0.37 times more return on investment than Idex ASA. However, Magnora ASA is 2.7 times less risky than Idex ASA. It trades about 0.19 of its potential returns per unit of risk. Idex ASA is currently generating about -0.2 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Idex ASA
Performance |
| Timeline |
| Magnora ASA |
| Idex ASA |
Magnora ASA and Idex ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Idex ASA
The main advantage of trading using opposite Magnora ASA and Idex ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Idex 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 Idex ASA will offset losses from the drop in Idex 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 |
| Idex ASA vs. Next Biometrics Group | Idex ASA vs. Kongsberg Automotive Holding | Idex ASA vs. Bergenbio ASA | Idex ASA vs. XXL 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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