Correlation Between Skyworks Solutions and Borregaard ASA

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

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

Diversification Opportunities for Skyworks Solutions and Borregaard ASA

-0.35

Correlation Coefficient

Skyworks Solutions  Borregaard ASA

Very good diversification

The 3 months correlation between Skyworks and Borregaard is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Skyworks Solutions and Borregaard ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borregaard ASA and Skyworks Solutions 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 Skyworks Solutions are associated (or correlated) with Borregaard ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borregaard ASA has no effect on the direction of Skyworks Solutions i.e., Skyworks Solutions and Borregaard ASA go up and down completely randomly.

Pair Corralation between Skyworks Solutions and Borregaard ASA

Given the investment horizon of 90 days Skyworks Solutions is expected to under-perform the Borregaard ASA. In addition to that, Skyworks Solutions is 2.05 times more volatile than Borregaard ASA. It trades about -0.03 of its total potential returns per unit of risk. Borregaard ASA is currently generating about 0.03 per unit of volatility. If you would invest  19,040  in Borregaard ASA on July 2, 2024 and sell it today you would earn a total of  380.00  from holding Borregaard ASA or generate 2.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Skyworks Solutions  vs.  Borregaard ASA

Skyworks Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skyworks Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Skyworks Solutions is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Borregaard ASA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Borregaard ASA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Borregaard ASA is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Skyworks Solutions and Borregaard ASA

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

The idea behind Skyworks Solutions and Borregaard 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.