Correlation Between Gjensidige Forsikring and Borregaard ASA
Can any of the company-specific risk be diversified away by investing in both Gjensidige Forsikring and Borregaard 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 Gjensidige Forsikring and Borregaard ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gjensidige Forsikring ASA and Borregaard ASA, you can compare the effects of market volatilities on Gjensidige Forsikring and Borregaard 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 Gjensidige Forsikring with a short position of Borregaard ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gjensidige Forsikring and Borregaard ASA.
Diversification Opportunities for Gjensidige Forsikring and Borregaard ASA
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gjensidige and Borregaard is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gjensidige Forsikring ASA and Borregaard ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borregaard ASA and Gjensidige Forsikring 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 Gjensidige Forsikring ASA are associated (or correlated) with Borregaard ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borregaard ASA has no effect on the direction of Gjensidige Forsikring i.e., Gjensidige Forsikring and Borregaard ASA go up and down completely randomly.
Pair Corralation between Gjensidige Forsikring and Borregaard ASA
Assuming the 90 days trading horizon Gjensidige Forsikring ASA is expected to generate 1.04 times more return on investment than Borregaard ASA. However, Gjensidige Forsikring is 1.04 times more volatile than Borregaard ASA. It trades about -0.03 of its potential returns per unit of risk. Borregaard ASA is currently generating about -0.22 per unit of risk. If you would invest 19,850 in Gjensidige Forsikring ASA on September 1, 2024 and sell it today you would lose (210.00) from holding Gjensidige Forsikring ASA or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gjensidige Forsikring ASA vs. Borregaard ASA
Performance |
| Timeline |
| Gjensidige Forsikring ASA |
| Borregaard ASA |
Gjensidige Forsikring and Borregaard ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gjensidige Forsikring and Borregaard ASA
The main advantage of trading using opposite Gjensidige Forsikring and Borregaard ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gjensidige Forsikring position performs unexpectedly, Borregaard 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 Borregaard ASA will offset losses from the drop in Borregaard ASA's long position.| Gjensidige Forsikring vs. DnB ASA | Gjensidige Forsikring vs. Storebrand ASA | Gjensidige Forsikring vs. Orkla ASA | Gjensidige Forsikring vs. Telenor ASA |
| Borregaard ASA vs. Horisont Energi AS | Borregaard ASA vs. Integrated Wind Solutions | Borregaard ASA vs. Vow ASA | Borregaard ASA vs. North Energy 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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