Correlation Between Saga Pure and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both Saga Pure 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 Saga Pure and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga Pure ASA and Magnora ASA, you can compare the effects of market volatilities on Saga Pure 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 Saga Pure with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Pure and Magnora ASA.
Diversification Opportunities for Saga Pure and Magnora ASA
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saga and Magnora is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Saga Pure ASA and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Saga Pure 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 Saga Pure ASA 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 Saga Pure i.e., Saga Pure and Magnora ASA go up and down completely randomly.
Pair Corralation between Saga Pure and Magnora ASA
Assuming the 90 days trading horizon Saga Pure ASA is expected to under-perform the Magnora ASA. But the stock apears to be less risky and, when comparing its historical volatility, Saga Pure ASA is 2.23 times less risky than Magnora ASA. The stock trades about -0.04 of its potential returns per unit of risk. The Magnora ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,434 in Magnora ASA on August 25, 2024 and sell it today you would earn a total of 56.00 from holding Magnora ASA or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saga Pure ASA vs. Magnora ASA
Performance |
| Timeline |
| Saga Pure ASA |
| Magnora ASA |
Saga Pure and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Pure and Magnora ASA
The main advantage of trading using opposite Saga Pure and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Pure 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.| Saga Pure vs. Aker Horizons AS | Saga Pure vs. REC Silicon ASA | Saga Pure vs. Kongsberg Automotive Holding | Saga Pure vs. Aker Carbon Capture |
| Magnora ASA vs. Aker Horizons AS | Magnora ASA vs. REC Silicon ASA | Magnora ASA vs. Vow ASA | Magnora ASA vs. Saga Pure 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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