Correlation Between Borregaard ASA and Endur ASA

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

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

Diversification Opportunities for Borregaard ASA and Endur ASA

0.87

Correlation Coefficient

Borregaard ASA  Endur ASA

Very poor diversification

The 3 months correlation between Borregaard and Endur is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Borregaard ASA and Endur ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endur ASA and Borregaard 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 Borregaard ASA are associated (or correlated) with Endur ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endur ASA has no effect on the direction of Borregaard ASA i.e., Borregaard ASA and Endur ASA go up and down completely randomly.

Pair Corralation between Borregaard ASA and Endur ASA

Assuming the 90 days trading horizon Borregaard ASA is expected to under-perform the Endur ASA. But the stock apears to be less risky and, when comparing its historical volatility, Borregaard ASA is 1.36 times less risky than Endur ASA. The stock trades about -0.19 of its potential returns per unit of risk. The Endur ASA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  5,100  in Endur ASA on March 20, 2024 and sell it today you would earn a total of  440.00  from holding Endur ASA or generate 8.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	85.0%
Values	Daily Returns

Borregaard ASA  vs.  Endur ASA

Borregaard ASA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Borregaard ASA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Borregaard ASA may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Endur ASA

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endur ASA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Endur ASA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Borregaard ASA and Endur ASA

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

The idea behind Borregaard ASA and Endur 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.