Correlation Between Techstep ASA and Beerenberg
Can any of the company-specific risk be diversified away by investing in both Techstep ASA and Beerenberg 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 Techstep ASA and Beerenberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techstep ASA and Beerenberg AS, you can compare the effects of market volatilities on Techstep ASA and Beerenberg 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 Techstep ASA with a short position of Beerenberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techstep ASA and Beerenberg.
Diversification Opportunities for Techstep ASA and Beerenberg
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Techstep and Beerenberg is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Techstep ASA and Beerenberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beerenberg AS and Techstep 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 Techstep ASA are associated (or correlated) with Beerenberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beerenberg AS has no effect on the direction of Techstep ASA i.e., Techstep ASA and Beerenberg go up and down completely randomly.
Pair Corralation between Techstep ASA and Beerenberg
Assuming the 90 days trading horizon Techstep ASA is expected to generate 10.23 times more return on investment than Beerenberg. However, Techstep ASA is 10.23 times more volatile than Beerenberg AS. It trades about 0.01 of its potential returns per unit of risk. Beerenberg AS is currently generating about -0.12 per unit of risk. If you would invest 1,210 in Techstep ASA on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Techstep ASA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techstep ASA vs. Beerenberg AS
Performance |
| Timeline |
| Techstep ASA |
| Beerenberg AS |
Techstep ASA and Beerenberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techstep ASA and Beerenberg
The main advantage of trading using opposite Techstep ASA and Beerenberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techstep ASA position performs unexpectedly, Beerenberg 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 Beerenberg will offset losses from the drop in Beerenberg's long position.| Techstep ASA vs. Next Biometrics Group | Techstep ASA vs. Zalaris ASA | Techstep ASA vs. NRC Group ASA | Techstep ASA vs. Goodtech |
| Beerenberg vs. Sparebanken Ost | Beerenberg vs. Skue Sparebank | Beerenberg vs. Polaris Media | Beerenberg vs. Clean Seas Seafood |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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