Correlation Between Bavarian Nordic and Gabriel Holding
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and Gabriel Holding 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 Bavarian Nordic and Gabriel Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and Gabriel Holding, you can compare the effects of market volatilities on Bavarian Nordic and Gabriel Holding 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 Bavarian Nordic with a short position of Gabriel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Gabriel Holding.
Diversification Opportunities for Bavarian Nordic and Gabriel Holding
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bavarian and Gabriel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Gabriel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabriel Holding and Bavarian Nordic 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 Bavarian Nordic are associated (or correlated) with Gabriel Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabriel Holding has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Gabriel Holding go up and down completely randomly.
Pair Corralation between Bavarian Nordic and Gabriel Holding
Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 0.89 times more return on investment than Gabriel Holding. However, Bavarian Nordic is 1.12 times less risky than Gabriel Holding. It trades about -0.07 of its potential returns per unit of risk. Gabriel Holding is currently generating about -0.15 per unit of risk. If you would invest 21,850 in Bavarian Nordic on August 27, 2024 and sell it today you would lose (2,010) from holding Bavarian Nordic or give up 9.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bavarian Nordic vs. Gabriel Holding
Performance |
| Timeline |
| Bavarian Nordic |
| Gabriel Holding |
Bavarian Nordic and Gabriel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and Gabriel Holding
The main advantage of trading using opposite Bavarian Nordic and Gabriel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, Gabriel Holding 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 Gabriel Holding will offset losses from the drop in Gabriel Holding's long position.| Bavarian Nordic vs. Ambu AS | Bavarian Nordic vs. Danske Bank AS | Bavarian Nordic vs. Genmab AS | Bavarian Nordic vs. DSV Panalpina AS |
| Gabriel Holding vs. SP Group AS | Gabriel Holding vs. Columbus AS | Gabriel Holding vs. Schouw Co | Gabriel Holding vs. RTX AS |
Check out your portfolio center.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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