Correlation Between RTW Venture and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both RTW Venture 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 RTW Venture and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTW Venture Fund and Magnora ASA, you can compare the effects of market volatilities on RTW Venture 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 RTW Venture with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and Magnora ASA.
Diversification Opportunities for RTW Venture and Magnora ASA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RTW and Magnora is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and RTW Venture 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 RTW Venture Fund 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 RTW Venture i.e., RTW Venture and Magnora ASA go up and down completely randomly.
Pair Corralation between RTW Venture and Magnora ASA
Assuming the 90 days trading horizon RTW Venture Fund is expected to generate 0.79 times more return on investment than Magnora ASA. However, RTW Venture Fund is 1.27 times less risky than Magnora ASA. It trades about -0.08 of its potential returns per unit of risk. Magnora ASA is currently generating about -0.11 per unit of risk. If you would invest 143.00 in RTW Venture Fund on November 3, 2024 and sell it today you would lose (4.00) from holding RTW Venture Fund or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTW Venture Fund vs. Magnora ASA
Performance |
| Timeline |
| RTW Venture Fund |
| Magnora ASA |
RTW Venture and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTW Venture and Magnora ASA
The main advantage of trading using opposite RTW Venture and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTW Venture 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.| RTW Venture vs. Bisichi Mining PLC | RTW Venture vs. Fortuna Silver Mines | RTW Venture vs. Seraphim Space Investment | RTW Venture vs. Hecla Mining Co |
| Magnora ASA vs. Take Two Interactive Software | Magnora ASA vs. Aeorema Communications Plc | Magnora ASA vs. Dairy Farm International | Magnora ASA vs. MoneysupermarketCom Group PLC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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