Correlation Between Tekna Holding and Bergen Carbon

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

By analyzing existing cross correlation between Tekna Holding AS and Bergen Carbon Solutions, you can compare the effects of market volatilities on Tekna Holding and Bergen Carbon 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 Tekna Holding with a short position of Bergen Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekna Holding and Bergen Carbon.

Diversification Opportunities for Tekna Holding and Bergen Carbon

0.9

Correlation Coefficient

Tekna Holding  Bergen Carbon

Almost no diversification

The 3 months correlation between Tekna and Bergen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tekna Holding AS and Bergen Carbon Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergen Carbon Solutions and Tekna Holding 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 Tekna Holding AS are associated (or correlated) with Bergen Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergen Carbon Solutions has no effect on the direction of Tekna Holding i.e., Tekna Holding and Bergen Carbon go up and down completely randomly.

Pair Corralation between Tekna Holding and Bergen Carbon

Assuming the 90 days trading horizon Tekna Holding AS is expected to generate 1.22 times more return on investment than Bergen Carbon. However, Tekna Holding is 1.22 times more volatile than Bergen Carbon Solutions. It trades about -0.05 of its potential returns per unit of risk. Bergen Carbon Solutions is currently generating about -0.12 per unit of risk. If you would invest  510.00  in Tekna Holding AS on September 15, 2024 and sell it today you would lose (111.00) from holding Tekna Holding AS or give up 21.76% of portfolio value over 90 days.

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

Tekna Holding AS  vs.  Bergen Carbon Solutions

Tekna Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekna Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bergen Carbon Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bergen Carbon Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Tekna Holding and Bergen Carbon

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

The idea behind Tekna Holding AS and Bergen Carbon Solutions 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.