Correlation Between Bergenbio ASA and Circa Group

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

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

Diversification Opportunities for Bergenbio ASA and Circa Group

0.02

Correlation Coefficient

Bergenbio ASA  Circa Group

Significant diversification

The 3 months correlation between Bergenbio and Circa is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bergenbio ASA and Circa Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Circa Group AS 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 Circa Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Circa Group AS has no effect on the direction of Bergenbio ASA i.e., Bergenbio ASA and Circa Group go up and down completely randomly.

Pair Corralation between Bergenbio ASA and Circa Group

Assuming the 90 days trading horizon Bergenbio ASA is expected to generate 1.4 times less return on investment than Circa Group. In addition to that, Bergenbio ASA is 2.43 times more volatile than Circa Group AS. It trades about 0.05 of its total potential returns per unit of risk. Circa Group AS is currently generating about 0.17 per unit of volatility. If you would invest  45.00  in Circa Group AS on September 13, 2024 and sell it today you would earn a total of  19.00  from holding Circa Group AS or generate 42.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bergenbio ASA  vs.  Circa Group AS

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 weak basic indicators, Bergenbio ASA displayed solid returns over the last few months and may actually be approaching a breakup point.

Circa Group AS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Circa Group AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Circa Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bergenbio ASA and Circa Group

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

The idea behind Bergenbio ASA and Circa Group AS 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.