Correlation Between Bergenbio ASA and Circa Group
Can any of the company-specific risk be diversified away by investing in both Bergenbio ASA and Circa Group 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 Bergenbio ASA and Circa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bergenbio ASA and Circa Group AS, you can compare the effects of market volatilities on Bergenbio ASA and Circa Group 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 Bergenbio ASA with a short position of Circa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergenbio ASA and Circa Group.
Diversification Opportunities for Bergenbio ASA and Circa Group
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bergenbio and Circa is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bergenbio ASA and Circa Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Circa Group AS and Bergenbio ASA 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 Bergenbio ASA are associated (or correlated) with Circa Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Circa Group AS has no effect on the direction of Bergenbio ASA i.e., Bergenbio ASA and Circa Group go up and down completely randomly.
Pair Corralation between Bergenbio ASA and Circa Group
Assuming the 90 days trading horizon Bergenbio ASA is expected to generate 2.21 times more return on investment than Circa Group. However, Bergenbio ASA is 2.21 times more volatile than Circa Group AS. It trades about 0.01 of its potential returns per unit of risk. Circa Group AS is currently generating about -0.04 per unit of risk. If you would invest 59,918 in Bergenbio ASA on September 2, 2024 and sell it today you would lose (58,831) from holding Bergenbio ASA or give up 98.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bergenbio ASA vs. Circa Group AS
Performance |
| Timeline |
| Bergenbio ASA |
| Circa Group AS |
Bergenbio ASA and Circa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergenbio ASA and Circa Group
The main advantage of trading using opposite Bergenbio ASA and Circa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergenbio ASA position performs unexpectedly, Circa Group 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 Circa Group will offset losses from the drop in Circa Group's long position.| Bergenbio ASA vs. DnB ASA | Bergenbio ASA vs. Sparebank 1 SMN | Bergenbio ASA vs. Norsk Hydro ASA | Bergenbio ASA vs. Equinor ASA |
| Circa Group vs. Carasent ASA | Circa Group vs. Bergenbio ASA | Circa Group vs. Photocure | Circa Group vs. Kitron 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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