Correlation Between Tekna Holding and Borregaard ASA
Can any of the company-specific risk be diversified away by investing in both Tekna Holding 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 Tekna Holding and Borregaard ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekna Holding AS and Borregaard ASA, you can compare the effects of market volatilities on Tekna Holding 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 Tekna Holding with a short position of Borregaard ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekna Holding and Borregaard ASA.
Diversification Opportunities for Tekna Holding and Borregaard ASA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tekna and Borregaard is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tekna Holding AS and Borregaard ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borregaard ASA and Tekna Holding 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 Tekna Holding AS 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 Tekna Holding i.e., Tekna Holding and Borregaard ASA go up and down completely randomly.
Pair Corralation between Tekna Holding and Borregaard ASA
Assuming the 90 days trading horizon Tekna Holding AS is expected to under-perform the Borregaard ASA. In addition to that, Tekna Holding is 4.73 times more volatile than Borregaard ASA. It trades about -0.14 of its total potential returns per unit of risk. Borregaard ASA is currently generating about -0.4 per unit of volatility. If you would invest 20,450 in Borregaard ASA on August 29, 2024 and sell it today you would lose (2,290) from holding Borregaard ASA or give up 11.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tekna Holding AS vs. Borregaard ASA
Performance |
| Timeline |
| Tekna Holding AS |
| Borregaard ASA |
Tekna Holding and Borregaard ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekna Holding and Borregaard ASA
The main advantage of trading using opposite Tekna Holding and Borregaard ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekna Holding 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.| Tekna Holding vs. Dolphin Drilling AS | Tekna Holding vs. Skue Sparebank | Tekna Holding vs. Pareto Bank ASA | Tekna Holding vs. Jaeren Sparebank |
| Borregaard ASA vs. Veidekke ASA | Borregaard ASA vs. Orkla ASA | Borregaard ASA vs. Kongsberg Gruppen ASA | Borregaard ASA vs. Storebrand 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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