Correlation Between Bergenbio ASA and Airthings ASA

Can any of the company-specific risk be diversified away by investing in both Bergenbio ASA and Airthings 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 Bergenbio ASA and Airthings ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bergenbio ASA and Airthings ASA, you can compare the effects of market volatilities on Bergenbio ASA and Airthings 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 Bergenbio ASA with a short position of Airthings ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergenbio ASA and Airthings ASA.

Diversification Opportunities for Bergenbio ASA and Airthings ASA

-0.59

Correlation Coefficient

Bergenbio ASA  Airthings ASA

Excellent diversification

The 3 months correlation between Bergenbio and Airthings is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bergenbio ASA and Airthings ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airthings ASA and Bergenbio 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 Bergenbio ASA are associated (or correlated) with Airthings ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airthings ASA has no effect on the direction of Bergenbio ASA i.e., Bergenbio ASA and Airthings ASA go up and down completely randomly.

Pair Corralation between Bergenbio ASA and Airthings ASA

Assuming the 90 days trading horizon Bergenbio ASA is expected to generate 2.43 times more return on investment than Airthings ASA. However, Bergenbio ASA is 2.43 times more volatile than Airthings ASA. It trades about 0.04 of its potential returns per unit of risk. Airthings ASA is currently generating about 0.02 per unit of risk. If you would invest  888.00  in Bergenbio ASA on September 16, 2024 and sell it today you would earn a total of  34.00  from holding Bergenbio ASA or generate 3.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bergenbio ASA  vs.  Airthings ASA

Bergenbio ASA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bergenbio ASA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bergenbio ASA displayed solid returns over the last few months and may actually be approaching a breakup point.

Airthings ASA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Airthings ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Airthings ASA is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bergenbio ASA and Airthings ASA

The main advantage of trading using opposite Bergenbio ASA and Airthings ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergenbio ASA position performs unexpectedly, Airthings 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 Airthings ASA will offset losses from the drop in Airthings ASA's long position.

The idea behind Bergenbio ASA and Airthings ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.