Correlation Between Endur ASA and Bonheur

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

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

Diversification Opportunities for Endur ASA and Bonheur

-0.43

Correlation Coefficient

Endur ASA  Bonheur

Very good diversification

The 3 months correlation between Endur and Bonheur is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Endur ASA and Bonheur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonheur and Endur 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 Endur ASA are associated (or correlated) with Bonheur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonheur has no effect on the direction of Endur ASA i.e., Endur ASA and Bonheur go up and down completely randomly.

Pair Corralation between Endur ASA and Bonheur

Assuming the 90 days trading horizon Endur ASA is expected to generate 0.65 times more return on investment than Bonheur. However, Endur ASA is 1.53 times less risky than Bonheur. It trades about 0.39 of its potential returns per unit of risk. Bonheur is currently generating about -0.14 per unit of risk. If you would invest  5,860  in Endur ASA on September 4, 2024 and sell it today you would earn a total of  510.00  from holding Endur ASA or generate 8.7% return on investment over 90 days.

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

Endur ASA  vs.  Bonheur

Endur ASA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endur ASA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Endur ASA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bonheur

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bonheur are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Bonheur is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Endur ASA and Bonheur

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

The idea behind Endur ASA and Bonheur 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.