Correlation Between Bergenbio ASA and Navamedic ASA
Can any of the company-specific risk be diversified away by investing in both Bergenbio ASA and Navamedic 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 Bergenbio ASA and Navamedic ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bergenbio ASA and Navamedic ASA, you can compare the effects of market volatilities on Bergenbio ASA and Navamedic 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 Bergenbio ASA with a short position of Navamedic ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergenbio ASA and Navamedic ASA.
Diversification Opportunities for Bergenbio ASA and Navamedic ASA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bergenbio and Navamedic is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bergenbio ASA and Navamedic ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navamedic ASA 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 Navamedic ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navamedic ASA has no effect on the direction of Bergenbio ASA i.e., Bergenbio ASA and Navamedic ASA go up and down completely randomly.
Pair Corralation between Bergenbio ASA and Navamedic ASA
Assuming the 90 days trading horizon Bergenbio ASA is expected to generate 2.49 times more return on investment than Navamedic ASA. However, Bergenbio ASA is 2.49 times more volatile than Navamedic ASA. It trades about -0.02 of its potential returns per unit of risk. Navamedic ASA is currently generating about -0.05 per unit of risk. If you would invest 2,180 in Bergenbio ASA on September 3, 2024 and sell it today you would lose (1,112) from holding Bergenbio ASA or give up 51.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bergenbio ASA vs. Navamedic ASA
Performance |
| Timeline |
| Bergenbio ASA |
| Navamedic ASA |
Bergenbio ASA and Navamedic ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergenbio ASA and Navamedic ASA
The main advantage of trading using opposite Bergenbio ASA and Navamedic ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergenbio ASA position performs unexpectedly, Navamedic 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 Navamedic ASA will offset losses from the drop in Navamedic ASA's long position.| Bergenbio ASA vs. PCI Biotech Holding | Bergenbio ASA vs. Photocure | Bergenbio ASA vs. Idex ASA | Bergenbio ASA vs. XXL ASA |
| Navamedic ASA vs. Photocure | Navamedic ASA vs. Medistim ASA | Navamedic ASA vs. PCI Biotech Holding | Navamedic ASA 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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