Correlation Between Bergenbio ASA and XXL ASA
Can any of the company-specific risk be diversified away by investing in both Bergenbio ASA and XXL 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 XXL 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 XXL ASA, you can compare the effects of market volatilities on Bergenbio ASA and XXL 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 XXL ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergenbio ASA and XXL ASA.
Diversification Opportunities for Bergenbio ASA and XXL ASA
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bergenbio and XXL is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bergenbio ASA and XXL ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XXL 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 XXL ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XXL ASA has no effect on the direction of Bergenbio ASA i.e., Bergenbio ASA and XXL ASA go up and down completely randomly.
Pair Corralation between Bergenbio ASA and XXL ASA
Assuming the 90 days trading horizon Bergenbio ASA is expected to generate 0.97 times more return on investment than XXL ASA. However, Bergenbio ASA is 1.04 times less risky than XXL ASA. It trades about -0.03 of its potential returns per unit of risk. XXL ASA is currently generating about -0.14 per unit of risk. If you would invest 2,695 in Bergenbio ASA on August 28, 2024 and sell it today you would lose (1,425) from holding Bergenbio ASA or give up 52.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Bergenbio ASA vs. XXL ASA
Performance |
| Timeline |
| Bergenbio ASA |
| XXL ASA |
Bergenbio ASA and XXL ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergenbio ASA and XXL ASA
The main advantage of trading using opposite Bergenbio ASA and XXL ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergenbio ASA position performs unexpectedly, XXL 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 XXL ASA will offset losses from the drop in XXL ASA's long position.| Bergenbio ASA vs. DnB ASA | Bergenbio ASA vs. Storebrand ASA | Bergenbio ASA vs. Sparebank 1 SR | Bergenbio ASA vs. Telenor 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |