Correlation Between Gyldendal ASA and Europris ASA
Can any of the company-specific risk be diversified away by investing in both Gyldendal ASA and Europris 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 Gyldendal ASA and Europris ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gyldendal ASA and Europris ASA, you can compare the effects of market volatilities on Gyldendal ASA and Europris 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 Gyldendal ASA with a short position of Europris ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gyldendal ASA and Europris ASA.
Diversification Opportunities for Gyldendal ASA and Europris ASA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gyldendal and Europris is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal ASA and Europris ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europris ASA and Gyldendal ASA 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 Gyldendal ASA are associated (or correlated) with Europris ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europris ASA has no effect on the direction of Gyldendal ASA i.e., Gyldendal ASA and Europris ASA go up and down completely randomly.
Pair Corralation between Gyldendal ASA and Europris ASA
Assuming the 90 days trading horizon Gyldendal ASA is expected to generate 2.0 times more return on investment than Europris ASA. However, Gyldendal ASA is 2.0 times more volatile than Europris ASA. It trades about -0.02 of its potential returns per unit of risk. Europris ASA is currently generating about -0.04 per unit of risk. If you would invest 42,600 in Gyldendal ASA on August 29, 2024 and sell it today you would lose (1,600) from holding Gyldendal ASA or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gyldendal ASA vs. Europris ASA
Performance |
| Timeline |
| Gyldendal ASA |
| Europris ASA |
Gyldendal ASA and Europris ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gyldendal ASA and Europris ASA
The main advantage of trading using opposite Gyldendal ASA and Europris ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gyldendal ASA position performs unexpectedly, Europris 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 Europris ASA will offset losses from the drop in Europris ASA's long position.| Gyldendal ASA vs. Arendals Fossekompani ASA | Gyldendal ASA vs. Byggma | Gyldendal ASA vs. AF Gruppen ASA | Gyldendal ASA vs. Medistim ASA |
| Europris ASA vs. Storebrand ASA | Europris ASA vs. XXL ASA | Europris ASA vs. Orkla ASA | Europris ASA vs. DnB 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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