Correlation Between Triad Group and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both Triad Group 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 Triad Group and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and Magnora ASA, you can compare the effects of market volatilities on Triad Group 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 Triad Group with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and Magnora ASA.
Diversification Opportunities for Triad Group and Magnora ASA
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Triad and Magnora is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and Magnora ASA go up and down completely randomly.
Pair Corralation between Triad Group and Magnora ASA
Assuming the 90 days trading horizon Triad Group PLC is expected to under-perform the Magnora ASA. In addition to that, Triad Group is 1.03 times more volatile than Magnora ASA. It trades about -0.07 of its total potential returns per unit of risk. Magnora ASA is currently generating about 0.2 per unit of volatility. If you would invest 2,265 in Magnora ASA on September 1, 2024 and sell it today you would earn a total of 240.00 from holding Magnora ASA or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triad Group PLC vs. Magnora ASA
Performance |
| Timeline |
| Triad Group PLC |
| Magnora ASA |
Triad Group and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and Magnora ASA
The main advantage of trading using opposite Triad Group and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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.| Triad Group vs. Axfood AB | Triad Group vs. EVS Broadcast Equipment | Triad Group vs. Premier Foods PLC | Triad Group vs. Silvercorp Metals |
| Magnora ASA vs. Uniper SE | Magnora ASA vs. Mulberry Group PLC | Magnora ASA vs. London Security Plc | Magnora ASA vs. Triad 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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