Correlation Between Bellevue Healthcare and Magnora ASA

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

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

Diversification Opportunities for Bellevue Healthcare and Magnora ASA

-0.42

Correlation Coefficient

Bellevue Healthcare  Magnora ASA

Very good diversification

The 3 months correlation between Bellevue and Magnora is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Healthcare Trust and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Bellevue Healthcare 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 Bellevue Healthcare Trust 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 Bellevue Healthcare i.e., Bellevue Healthcare and Magnora ASA go up and down completely randomly.

Pair Corralation between Bellevue Healthcare and Magnora ASA

Assuming the 90 days trading horizon Bellevue Healthcare Trust is expected to generate 0.43 times more return on investment than Magnora ASA. However, Bellevue Healthcare Trust is 2.31 times less risky than Magnora ASA. It trades about -0.01 of its potential returns per unit of risk. Magnora ASA is currently generating about -0.01 per unit of risk. If you would invest  14,040  in Bellevue Healthcare Trust on September 19, 2024 and sell it today you would lose (400.00) from holding Bellevue Healthcare Trust or give up 2.85% of portfolio value over 90 days.

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

Bellevue Healthcare Trust  vs.  Magnora ASA

Bellevue Healthcare Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bellevue Healthcare Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Magnora ASA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Magnora ASA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Magnora ASA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bellevue Healthcare and Magnora ASA

The main advantage of trading using opposite Bellevue Healthcare and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellevue Healthcare 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 Bellevue Healthcare Trust 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.