Correlation Between Arcticzymes Technologies and Bergenbio ASA
Can any of the company-specific risk be diversified away by investing in both Arcticzymes Technologies and Bergenbio 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 Arcticzymes Technologies and Bergenbio ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcticzymes Technologies ASA and Bergenbio ASA, you can compare the effects of market volatilities on Arcticzymes Technologies and Bergenbio 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 Arcticzymes Technologies with a short position of Bergenbio ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcticzymes Technologies and Bergenbio ASA.
Diversification Opportunities for Arcticzymes Technologies and Bergenbio ASA
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arcticzymes and Bergenbio is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and Bergenbio ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergenbio ASA and Arcticzymes Technologies 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 Arcticzymes Technologies ASA are associated (or correlated) with Bergenbio ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergenbio ASA has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and Bergenbio ASA go up and down completely randomly.
Pair Corralation between Arcticzymes Technologies and Bergenbio ASA
Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to under-perform the Bergenbio ASA. But the stock apears to be less risky and, when comparing its historical volatility, Arcticzymes Technologies ASA is 3.09 times less risky than Bergenbio ASA. The stock trades about -0.27 of its potential returns per unit of risk. The Bergenbio ASA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 856.00 in Bergenbio ASA on August 28, 2024 and sell it today you would earn a total of 414.00 from holding Bergenbio ASA or generate 48.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcticzymes Technologies ASA vs. Bergenbio ASA
Performance |
| Timeline |
| Arcticzymes Technologies |
| Bergenbio ASA |
Arcticzymes Technologies and Bergenbio ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcticzymes Technologies and Bergenbio ASA
The main advantage of trading using opposite Arcticzymes Technologies and Bergenbio ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcticzymes Technologies position performs unexpectedly, Bergenbio 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 Bergenbio ASA will offset losses from the drop in Bergenbio ASA's long position.| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron ASA |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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