Correlation Between Magnora ASA and Strongpoint ASA
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Strongpoint 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 Strongpoint 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 Strongpoint ASA, you can compare the effects of market volatilities on Magnora ASA and Strongpoint 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 Strongpoint ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Strongpoint ASA.
Diversification Opportunities for Magnora ASA and Strongpoint ASA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnora and Strongpoint is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Strongpoint ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strongpoint 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 Strongpoint ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strongpoint ASA has no effect on the direction of Magnora ASA i.e., Magnora ASA and Strongpoint ASA go up and down completely randomly.
Pair Corralation between Magnora ASA and Strongpoint ASA
Assuming the 90 days trading horizon Magnora ASA is expected to under-perform the Strongpoint ASA. But the stock apears to be less risky and, when comparing its historical volatility, Magnora ASA is 1.04 times less risky than Strongpoint ASA. The stock trades about -0.41 of its potential returns per unit of risk. The Strongpoint ASA is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 1,060 in Strongpoint ASA on November 29, 2024 and sell it today you would lose (76.00) from holding Strongpoint ASA or give up 7.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Strongpoint ASA
Performance |
| Timeline |
| Magnora ASA |
| Strongpoint ASA |
Magnora ASA and Strongpoint ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Strongpoint ASA
The main advantage of trading using opposite Magnora ASA and Strongpoint ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Strongpoint 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 Strongpoint ASA will offset losses from the drop in Strongpoint 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 |
| Strongpoint ASA vs. Kitron ASA | Strongpoint ASA vs. Norske Skog Asa | Strongpoint ASA vs. Magnora ASA | Strongpoint ASA vs. Elkem 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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