Correlation Between Gjensidige Forsikring and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Gjensidige Forsikring and Equinor 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 Gjensidige Forsikring and Equinor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gjensidige Forsikring ASA and Equinor ASA, you can compare the effects of market volatilities on Gjensidige Forsikring and Equinor 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 Gjensidige Forsikring with a short position of Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gjensidige Forsikring and Equinor ASA.
Diversification Opportunities for Gjensidige Forsikring and Equinor ASA
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gjensidige and Equinor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gjensidige Forsikring ASA and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA and Gjensidige Forsikring 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 Gjensidige Forsikring ASA are associated (or correlated) with Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of Gjensidige Forsikring i.e., Gjensidige Forsikring and Equinor ASA go up and down completely randomly.
Pair Corralation between Gjensidige Forsikring and Equinor ASA
Assuming the 90 days trading horizon Gjensidige Forsikring ASA is expected to generate 0.77 times more return on investment than Equinor ASA. However, Gjensidige Forsikring ASA is 1.31 times less risky than Equinor ASA. It trades about 0.07 of its potential returns per unit of risk. Equinor ASA is currently generating about 0.01 per unit of risk. If you would invest 15,278 in Gjensidige Forsikring ASA on August 25, 2024 and sell it today you would earn a total of 4,272 from holding Gjensidige Forsikring ASA or generate 27.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gjensidige Forsikring ASA vs. Equinor ASA
Performance |
Timeline |
Gjensidige Forsikring ASA |
Equinor ASA |
Gjensidige Forsikring and Equinor ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gjensidige Forsikring and Equinor ASA
The main advantage of trading using opposite Gjensidige Forsikring and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gjensidige Forsikring position performs unexpectedly, Equinor 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.Gjensidige Forsikring vs. DnB ASA | Gjensidige Forsikring vs. Storebrand ASA | Gjensidige Forsikring vs. Orkla ASA | Gjensidige Forsikring vs. Telenor ASA |
Equinor ASA vs. DnB ASA | Equinor ASA vs. Mowi ASA | Equinor ASA vs. Yara International ASA | Equinor ASA vs. Telenor ASA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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