Correlation Between Bergenbio ASA and PCI Biotech
Can any of the company-specific risk be diversified away by investing in both Bergenbio ASA and PCI Biotech 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 PCI Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bergenbio ASA and PCI Biotech Holding, you can compare the effects of market volatilities on Bergenbio ASA and PCI Biotech 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 PCI Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergenbio ASA and PCI Biotech.
Diversification Opportunities for Bergenbio ASA and PCI Biotech
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bergenbio and PCI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bergenbio ASA and PCI Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCI Biotech Holding 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 PCI Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCI Biotech Holding has no effect on the direction of Bergenbio ASA i.e., Bergenbio ASA and PCI Biotech go up and down completely randomly.
Pair Corralation between Bergenbio ASA and PCI Biotech
Assuming the 90 days trading horizon Bergenbio ASA is expected to generate 1.93 times more return on investment than PCI Biotech. However, Bergenbio ASA is 1.93 times more volatile than PCI Biotech Holding. It trades about 0.02 of its potential returns per unit of risk. PCI Biotech Holding is currently generating about 0.03 per unit of risk. If you would invest 41,874 in Bergenbio ASA on November 27, 2024 and sell it today you would lose (40,854) from holding Bergenbio ASA or give up 97.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bergenbio ASA vs. PCI Biotech Holding
Performance |
| Timeline |
| Bergenbio ASA |
| PCI Biotech Holding |
Bergenbio ASA and PCI Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergenbio ASA and PCI Biotech
The main advantage of trading using opposite Bergenbio ASA and PCI Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergenbio ASA position performs unexpectedly, PCI Biotech 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 PCI Biotech will offset losses from the drop in PCI Biotech's long position.| Bergenbio ASA vs. PCI Biotech Holding | Bergenbio ASA vs. Photocure | Bergenbio ASA vs. Idex ASA | Bergenbio ASA vs. XXL ASA |
| PCI Biotech vs. Morrow Bank ASA | PCI Biotech vs. Romsdal Sparebank | PCI Biotech vs. Bien Sparebank ASA | PCI Biotech vs. Sparebanken Ost |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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