Correlation Between Jacquet Metal and Magnora ASA

Can any of the company-specific risk be diversified away by investing in both Jacquet Metal 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 Jacquet Metal and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jacquet Metal Service and Magnora ASA, you can compare the effects of market volatilities on Jacquet Metal 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 Jacquet Metal with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Magnora ASA.

Diversification Opportunities for Jacquet Metal and Magnora ASA

0.45

Correlation Coefficient

Jacquet Metal  Magnora ASA

Very weak diversification

The 3 months correlation between Jacquet and Magnora is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Jacquet Metal 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 Jacquet Metal Service 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 Jacquet Metal i.e., Jacquet Metal and Magnora ASA go up and down completely randomly.

Pair Corralation between Jacquet Metal and Magnora ASA

Assuming the 90 days trading horizon Jacquet Metal Service is expected to under-perform the Magnora ASA. In addition to that, Jacquet Metal is 1.39 times more volatile than Magnora ASA. It trades about -0.23 of its total potential returns per unit of risk. Magnora ASA is currently generating about -0.13 per unit of volatility. If you would invest  2,765  in Magnora ASA on October 25, 2024 and sell it today you would lose (115.00) from holding Magnora ASA or give up 4.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Jacquet Metal Service  vs.  Magnora ASA

Jacquet Metal Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jacquet Metal Service has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Jacquet Metal is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Magnora ASA

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Magnora ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Magnora ASA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacquet Metal and Magnora ASA

The main advantage of trading using opposite Jacquet Metal and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal 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.

The idea behind Jacquet Metal Service and Magnora ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.