Correlation Between Beerenberg and Goodtech
Can any of the company-specific risk be diversified away by investing in both Beerenberg and Goodtech 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 Beerenberg and Goodtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beerenberg AS and Goodtech, you can compare the effects of market volatilities on Beerenberg and Goodtech 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 Beerenberg with a short position of Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beerenberg and Goodtech.
Diversification Opportunities for Beerenberg and Goodtech
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beerenberg and Goodtech is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Beerenberg AS and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech and Beerenberg 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 Beerenberg AS are associated (or correlated) with Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Beerenberg i.e., Beerenberg and Goodtech go up and down completely randomly.
Pair Corralation between Beerenberg and Goodtech
Assuming the 90 days trading horizon Beerenberg AS is expected to generate 0.33 times more return on investment than Goodtech. However, Beerenberg AS is 2.99 times less risky than Goodtech. It trades about 0.0 of its potential returns per unit of risk. Goodtech is currently generating about -0.23 per unit of risk. If you would invest 4,100 in Beerenberg AS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Beerenberg AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beerenberg AS vs. Goodtech
Performance |
| Timeline |
| Beerenberg AS |
| Goodtech |
Beerenberg and Goodtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beerenberg and Goodtech
The main advantage of trading using opposite Beerenberg and Goodtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beerenberg position performs unexpectedly, Goodtech 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 Goodtech will offset losses from the drop in Goodtech's long position.| Beerenberg vs. SpareBank 1 stlandet | Beerenberg vs. Helgeland Sparebank | Beerenberg vs. Xplora Technologies As | Beerenberg vs. Lery Seafood Group |
| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Borgestad A | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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