Correlation Between Navamedic ASA and Bergenbio ASA
Can any of the company-specific risk be diversified away by investing in both Navamedic ASA and Bergenbio 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 Navamedic ASA and Bergenbio ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navamedic ASA and Bergenbio ASA, you can compare the effects of market volatilities on Navamedic ASA and Bergenbio 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 Navamedic ASA with a short position of Bergenbio ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navamedic ASA and Bergenbio ASA.
Diversification Opportunities for Navamedic ASA and Bergenbio ASA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Navamedic and Bergenbio is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Navamedic ASA and Bergenbio ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergenbio ASA and Navamedic 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 Navamedic ASA are associated (or correlated) with Bergenbio ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergenbio ASA has no effect on the direction of Navamedic ASA i.e., Navamedic ASA and Bergenbio ASA go up and down completely randomly.
Pair Corralation between Navamedic ASA and Bergenbio ASA
Assuming the 90 days trading horizon Navamedic ASA is expected to under-perform the Bergenbio ASA. But the stock apears to be less risky and, when comparing its historical volatility, Navamedic ASA is 2.49 times less risky than Bergenbio ASA. The stock trades about -0.05 of its potential returns per unit of risk. The Bergenbio ASA is currently generating about -0.02 of returns per unit of risk over similar time horizon. 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 |
Navamedic ASA vs. Bergenbio ASA
Performance |
| Timeline |
| Navamedic ASA |
| Bergenbio ASA |
Navamedic ASA and Bergenbio ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navamedic ASA and Bergenbio ASA
The main advantage of trading using opposite Navamedic ASA and Bergenbio ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navamedic ASA position performs unexpectedly, Bergenbio 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 Bergenbio ASA will offset losses from the drop in Bergenbio ASA's long position.| Navamedic ASA vs. Photocure | Navamedic ASA vs. Medistim ASA | Navamedic ASA vs. PCI Biotech Holding | Navamedic ASA vs. Kitron ASA |
| Bergenbio ASA vs. PCI Biotech Holding | Bergenbio ASA vs. Photocure | Bergenbio ASA vs. Idex ASA | Bergenbio ASA vs. XXL 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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