Correlation Between Beeks TradingLtd and Magnora ASA

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

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

Diversification Opportunities for Beeks TradingLtd and Magnora ASA

0.29

Correlation Coefficient

Beeks TradingLtd  Magnora ASA

Modest diversification

The 3 months correlation between Beeks and Magnora is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and Beeks TradingLtd 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 Beeks Trading 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 Beeks TradingLtd i.e., Beeks TradingLtd and Magnora ASA go up and down completely randomly.

Pair Corralation between Beeks TradingLtd and Magnora ASA

Assuming the 90 days trading horizon Beeks Trading is expected to generate 2.1 times more return on investment than Magnora ASA. However, Beeks TradingLtd is 2.1 times more volatile than Magnora ASA. It trades about -0.04 of its potential returns per unit of risk. Magnora ASA is currently generating about -0.1 per unit of risk. If you would invest  27,500  in Beeks Trading on December 30, 2024 and sell it today you would lose (4,500) from holding Beeks Trading or give up 16.36% of portfolio value over 90 days.

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

Beeks Trading  vs.  Magnora ASA

Beeks TradingLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beeks Trading 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

Very Weak

Over the last 90 days Magnora ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Beeks TradingLtd and Magnora ASA

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

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.