Correlation Between FOM Technologies and Gabriel Holding
Can any of the company-specific risk be diversified away by investing in both FOM Technologies 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 FOM Technologies and Gabriel Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOM Technologies AS and Gabriel Holding, you can compare the effects of market volatilities on FOM Technologies 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 FOM Technologies with a short position of Gabriel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and Gabriel Holding.
Diversification Opportunities for FOM Technologies and Gabriel Holding
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FOM and Gabriel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and Gabriel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabriel Holding and FOM Technologies 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 FOM Technologies AS 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 FOM Technologies i.e., FOM Technologies and Gabriel Holding go up and down completely randomly.
Pair Corralation between FOM Technologies and Gabriel Holding
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the Gabriel Holding. But the stock apears to be less risky and, when comparing its historical volatility, FOM Technologies AS is 1.38 times less risky than Gabriel Holding. The stock trades about -0.46 of its potential returns per unit of risk. The Gabriel Holding is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 25,200 in Gabriel Holding on August 29, 2024 and sell it today you would lose (4,400) from holding Gabriel Holding or give up 17.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOM Technologies AS vs. Gabriel Holding
Performance |
| Timeline |
| FOM Technologies |
| Gabriel Holding |
FOM Technologies and Gabriel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and Gabriel Holding
The main advantage of trading using opposite FOM Technologies and Gabriel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies 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.| FOM Technologies vs. cBrain AS | FOM Technologies vs. Penneo AS | FOM Technologies vs. Shape Robotics AS | FOM Technologies vs. ALK Abell 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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