Correlation Between Bergen Carbon and Horisont Energi
Can any of the company-specific risk be diversified away by investing in both Bergen Carbon and Horisont Energi 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 Bergen Carbon and Horisont Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bergen Carbon Solutions and Horisont Energi AS, you can compare the effects of market volatilities on Bergen Carbon and Horisont Energi 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 Bergen Carbon with a short position of Horisont Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergen Carbon and Horisont Energi.
Diversification Opportunities for Bergen Carbon and Horisont Energi
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bergen and Horisont is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bergen Carbon Solutions and Horisont Energi AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horisont Energi AS and Bergen Carbon 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 Bergen Carbon Solutions are associated (or correlated) with Horisont Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horisont Energi AS has no effect on the direction of Bergen Carbon i.e., Bergen Carbon and Horisont Energi go up and down completely randomly.
Pair Corralation between Bergen Carbon and Horisont Energi
Assuming the 90 days trading horizon Bergen Carbon Solutions is expected to under-perform the Horisont Energi. In addition to that, Bergen Carbon is 1.29 times more volatile than Horisont Energi AS. It trades about -0.05 of its total potential returns per unit of risk. Horisont Energi AS is currently generating about -0.04 per unit of volatility. If you would invest 390.00 in Horisont Energi AS on September 3, 2024 and sell it today you would lose (138.00) from holding Horisont Energi AS or give up 35.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bergen Carbon Solutions vs. Horisont Energi AS
Performance |
| Timeline |
| Bergen Carbon Solutions |
| Horisont Energi AS |
Bergen Carbon and Horisont Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergen Carbon and Horisont Energi
The main advantage of trading using opposite Bergen Carbon and Horisont Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergen Carbon position performs unexpectedly, Horisont Energi 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 Horisont Energi will offset losses from the drop in Horisont Energi's long position.| Bergen Carbon vs. Jaeren Sparebank | Bergen Carbon vs. Polaris Media | Bergen Carbon vs. Nidaros Sparebank | Bergen Carbon vs. Sparebank 1 SMN |
| Horisont Energi vs. Melhus Sparebank | Horisont Energi vs. Austevoll Seafood ASA | Horisont Energi vs. Sea1 Offshore | Horisont Energi vs. Sunndal Sparebank |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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