Correlation Between Bergenbio ASA and Ultimovacs ASA

Can any of the company-specific risk be diversified away by investing in both Bergenbio ASA and Ultimovacs 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 Ultimovacs 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 Ultimovacs ASA, you can compare the effects of market volatilities on Bergenbio ASA and Ultimovacs 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 Ultimovacs ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergenbio ASA and Ultimovacs ASA.

Diversification Opportunities for Bergenbio ASA and Ultimovacs ASA

0.07

Correlation Coefficient

Bergenbio ASA  Ultimovacs ASA

Significant diversification

The 3 months correlation between Bergenbio and Ultimovacs is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bergenbio ASA and Ultimovacs ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultimovacs 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 Ultimovacs ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultimovacs ASA has no effect on the direction of Bergenbio ASA i.e., Bergenbio ASA and Ultimovacs ASA go up and down completely randomly.

Pair Corralation between Bergenbio ASA and Ultimovacs ASA

Assuming the 90 days trading horizon Bergenbio ASA is expected to generate 7.02 times less return on investment than Ultimovacs ASA. In addition to that, Bergenbio ASA is 1.37 times more volatile than Ultimovacs ASA. It trades about 0.01 of its total potential returns per unit of risk. Ultimovacs ASA is currently generating about 0.12 per unit of volatility. If you would invest  171.00  in Ultimovacs ASA on September 26, 2024 and sell it today you would earn a total of  73.00  from holding Ultimovacs ASA or generate 42.69% 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.  Ultimovacs ASA

Bergenbio ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bergenbio ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very conflicting basic indicators, Bergenbio ASA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ultimovacs ASA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ultimovacs ASA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Ultimovacs ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bergenbio ASA and Ultimovacs ASA

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

The idea behind Bergenbio ASA and Ultimovacs 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.