Correlation Between Ultimovacs ASA and Bergenbio ASA
Can any of the company-specific risk be diversified away by investing in both Ultimovacs 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 Ultimovacs 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 Ultimovacs ASA and Bergenbio ASA, you can compare the effects of market volatilities on Ultimovacs 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 Ultimovacs ASA with a short position of Bergenbio ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimovacs ASA and Bergenbio ASA.
Diversification Opportunities for Ultimovacs ASA and Bergenbio ASA
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ultimovacs and Bergenbio is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ultimovacs ASA and Bergenbio ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergenbio ASA and Ultimovacs 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 Ultimovacs 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 Ultimovacs ASA i.e., Ultimovacs ASA and Bergenbio ASA go up and down completely randomly.
Pair Corralation between Ultimovacs ASA and Bergenbio ASA
Assuming the 90 days trading horizon Ultimovacs ASA is expected to under-perform the Bergenbio ASA. In addition to that, Ultimovacs ASA is 1.4 times more volatile than Bergenbio ASA. It trades about -0.06 of its total potential returns per unit of risk. Bergenbio ASA is currently generating about 0.0 per unit of volatility. If you would invest 1,816 in Bergenbio ASA on September 1, 2024 and sell it today you would lose (729.00) from holding Bergenbio ASA or give up 40.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Ultimovacs ASA vs. Bergenbio ASA
Performance |
| Timeline |
| Ultimovacs ASA |
| Bergenbio ASA |
Ultimovacs ASA and Bergenbio ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultimovacs ASA and Bergenbio ASA
The main advantage of trading using opposite Ultimovacs ASA and Bergenbio ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimovacs 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.| Ultimovacs ASA vs. Bergenbio ASA | Ultimovacs ASA vs. Nykode Therapeutics ASA | Ultimovacs ASA vs. PCI Biotech Holding |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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