Correlation Between Borregaard ASA and Bonheur
Can any of the company-specific risk be diversified away by investing in both Borregaard ASA and Bonheur 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 Borregaard ASA and Bonheur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borregaard ASA and Bonheur, you can compare the effects of market volatilities on Borregaard ASA and Bonheur 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 Borregaard ASA with a short position of Bonheur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borregaard ASA and Bonheur.
Diversification Opportunities for Borregaard ASA and Bonheur
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Borregaard and Bonheur is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Borregaard ASA and Bonheur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonheur and Borregaard 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 Borregaard ASA are associated (or correlated) with Bonheur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonheur has no effect on the direction of Borregaard ASA i.e., Borregaard ASA and Bonheur go up and down completely randomly.
Pair Corralation between Borregaard ASA and Bonheur
Assuming the 90 days trading horizon Borregaard ASA is expected to under-perform the Bonheur. But the stock apears to be less risky and, when comparing its historical volatility, Borregaard ASA is 1.09 times less risky than Bonheur. The stock trades about -0.33 of its potential returns per unit of risk. The Bonheur is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 27,750 in Bonheur on August 25, 2024 and sell it today you would lose (1,450) from holding Bonheur or give up 5.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Borregaard ASA vs. Bonheur
Performance |
| Timeline |
| Borregaard ASA |
| Bonheur |
Borregaard ASA and Bonheur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borregaard ASA and Bonheur
The main advantage of trading using opposite Borregaard ASA and Bonheur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borregaard ASA position performs unexpectedly, Bonheur 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 Bonheur will offset losses from the drop in Bonheur's long position.| Borregaard ASA vs. Veidekke ASA | Borregaard ASA vs. Orkla ASA | Borregaard ASA vs. Kongsberg Gruppen ASA | Borregaard ASA vs. Storebrand 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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