Correlation Between Beerenberg and Ocean Sun
Can any of the company-specific risk be diversified away by investing in both Beerenberg and Ocean Sun 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 Ocean Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beerenberg AS and Ocean Sun As, you can compare the effects of market volatilities on Beerenberg and Ocean Sun 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 Ocean Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beerenberg and Ocean Sun.
Diversification Opportunities for Beerenberg and Ocean Sun
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beerenberg and Ocean is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Beerenberg AS and Ocean Sun As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Sun As 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 Ocean Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Sun As has no effect on the direction of Beerenberg i.e., Beerenberg and Ocean Sun go up and down completely randomly.
Pair Corralation between Beerenberg and Ocean Sun
Assuming the 90 days trading horizon Beerenberg AS is expected to generate 0.42 times more return on investment than Ocean Sun. However, Beerenberg AS is 2.41 times less risky than Ocean Sun. It trades about 0.15 of its potential returns per unit of risk. Ocean Sun As is currently generating about -0.04 per unit of risk. If you would invest 2,760 in Beerenberg AS on September 5, 2024 and sell it today you would earn a total of 1,340 from holding Beerenberg AS or generate 48.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.45% |
| Values | Daily Returns |
Beerenberg AS vs. Ocean Sun As
Performance |
| Timeline |
| Beerenberg AS |
| Ocean Sun As |
Beerenberg and Ocean Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beerenberg and Ocean Sun
The main advantage of trading using opposite Beerenberg and Ocean Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beerenberg position performs unexpectedly, Ocean Sun 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 Ocean Sun will offset losses from the drop in Ocean Sun's long position.| Beerenberg vs. Equinor ASA | Beerenberg vs. DnB ASA | Beerenberg vs. Aker BP ASA | Beerenberg vs. Telenor ASA |
| Ocean Sun vs. Aurskog Sparebank | Ocean Sun vs. Sea1 Offshore | Ocean Sun vs. Skue Sparebank | Ocean Sun vs. Lea Bank 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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