Correlation Between PPHE Hotel and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and Magnora 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 PPHE Hotel and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and Magnora ASA, you can compare the effects of market volatilities on PPHE Hotel and Magnora 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 PPHE Hotel with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Magnora ASA.
Diversification Opportunities for PPHE Hotel and Magnora ASA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PPHE and Magnora is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and PPHE Hotel 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 PPHE Hotel Group are associated (or correlated) with Magnora ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnora ASA has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and Magnora ASA go up and down completely randomly.
Pair Corralation between PPHE Hotel and Magnora ASA
Assuming the 90 days trading horizon PPHE Hotel Group is expected to under-perform the Magnora ASA. In addition to that, PPHE Hotel is 1.15 times more volatile than Magnora ASA. It trades about -0.12 of its total potential returns per unit of risk. Magnora ASA is currently generating about 0.21 per unit of volatility. If you would invest 2,505 in Magnora ASA on October 13, 2024 and sell it today you would earn a total of 165.00 from holding Magnora ASA or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE Hotel Group vs. Magnora ASA
Performance |
| Timeline |
| PPHE Hotel Group |
| Magnora ASA |
PPHE Hotel and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Magnora ASA
The main advantage of trading using opposite PPHE Hotel and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, Magnora 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 Magnora ASA will offset losses from the drop in Magnora ASA's long position.| PPHE Hotel vs. Oxford Technology 2 | PPHE Hotel vs. Pfeiffer Vacuum Technology | PPHE Hotel vs. Sabien Technology Group | PPHE Hotel vs. alstria office REIT AG |
| Magnora ASA vs. XLMedia PLC | Magnora ASA vs. LBG Media PLC | Magnora ASA vs. Catalyst Media Group | Magnora ASA vs. Everyman Media Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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