Correlation Between PureTech Health and Magnora ASA

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

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

Diversification Opportunities for PureTech Health and Magnora ASA

0.46

Correlation Coefficient

PureTech Health  Magnora ASA

Very weak diversification

The 3 months correlation between PureTech and Magnora is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and PureTech Health 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 PureTech Health 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 PureTech Health i.e., PureTech Health and Magnora ASA go up and down completely randomly.

Pair Corralation between PureTech Health and Magnora ASA

Assuming the 90 days trading horizon PureTech Health is expected to generate 1.74 times less return on investment than Magnora ASA. In addition to that, PureTech Health is 1.68 times more volatile than Magnora ASA. It trades about 0.06 of its total potential returns per unit of risk. Magnora ASA is currently generating about 0.17 per unit of volatility. If you would invest  1,988  in Magnora ASA on April 8, 2025 and sell it today you would earn a total of  462.00  from holding Magnora ASA or generate 23.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

PureTech Health plc  vs.  Magnora ASA

PureTech Health plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PureTech Health plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, PureTech Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Magnora ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Magnora ASA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Magnora ASA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureTech Health and Magnora ASA

The main advantage of trading using opposite PureTech Health and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health 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 PureTech Health plc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.