Correlation Between Bergen Carbon and Veidekke ASA
Can any of the company-specific risk be diversified away by investing in both Bergen Carbon and Veidekke 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 Bergen Carbon and Veidekke ASA 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 Veidekke ASA, you can compare the effects of market volatilities on Bergen Carbon and Veidekke 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 Bergen Carbon with a short position of Veidekke ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergen Carbon and Veidekke ASA.
Diversification Opportunities for Bergen Carbon and Veidekke ASA
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bergen and Veidekke is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bergen Carbon Solutions and Veidekke ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veidekke ASA 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 Veidekke ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veidekke ASA has no effect on the direction of Bergen Carbon i.e., Bergen Carbon and Veidekke ASA go up and down completely randomly.
Pair Corralation between Bergen Carbon and Veidekke ASA
Assuming the 90 days trading horizon Bergen Carbon Solutions is expected to under-perform the Veidekke ASA. In addition to that, Bergen Carbon is 3.7 times more volatile than Veidekke ASA. It trades about -0.08 of its total potential returns per unit of risk. Veidekke ASA is currently generating about 0.28 per unit of volatility. If you would invest 12,520 in Veidekke ASA on September 1, 2024 and sell it today you would earn a total of 1,140 from holding Veidekke ASA or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bergen Carbon Solutions vs. Veidekke ASA
Performance |
| Timeline |
| Bergen Carbon Solutions |
| Veidekke ASA |
Bergen Carbon and Veidekke ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergen Carbon and Veidekke ASA
The main advantage of trading using opposite Bergen Carbon and Veidekke ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergen Carbon position performs unexpectedly, Veidekke 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 Veidekke ASA will offset losses from the drop in Veidekke ASA's long position.| Bergen Carbon vs. Horisont Energi AS | Bergen Carbon vs. Integrated Wind Solutions | Bergen Carbon vs. Vow ASA | Bergen Carbon vs. North Energy 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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