Correlation Between Gyldendal ASA and SeaBird Exploration
Can any of the company-specific risk be diversified away by investing in both Gyldendal ASA and SeaBird Exploration 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 SeaBird Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gyldendal ASA and SeaBird Exploration Plc, you can compare the effects of market volatilities on Gyldendal ASA and SeaBird Exploration 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 SeaBird Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gyldendal ASA and SeaBird Exploration.
Diversification Opportunities for Gyldendal ASA and SeaBird Exploration
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gyldendal and SeaBird is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal ASA and SeaBird Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeaBird Exploration Plc 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 SeaBird Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeaBird Exploration Plc has no effect on the direction of Gyldendal ASA i.e., Gyldendal ASA and SeaBird Exploration go up and down completely randomly.
Pair Corralation between Gyldendal ASA and SeaBird Exploration
Assuming the 90 days trading horizon Gyldendal ASA is expected to under-perform the SeaBird Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Gyldendal ASA is 1.02 times less risky than SeaBird Exploration. The stock trades about -0.13 of its potential returns per unit of risk. The SeaBird Exploration Plc is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 505.00 in SeaBird Exploration Plc on August 31, 2024 and sell it today you would earn a total of 64.00 from holding SeaBird Exploration Plc or generate 12.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gyldendal ASA vs. SeaBird Exploration Plc
Performance |
| Timeline |
| Gyldendal ASA |
| SeaBird Exploration Plc |
Gyldendal ASA and SeaBird Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gyldendal ASA and SeaBird Exploration
The main advantage of trading using opposite Gyldendal ASA and SeaBird Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gyldendal ASA position performs unexpectedly, SeaBird Exploration 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 SeaBird Exploration will offset losses from the drop in SeaBird Exploration's long position.| Gyldendal ASA vs. Arendals Fossekompani ASA | Gyldendal ASA vs. Byggma | Gyldendal ASA vs. AF Gruppen ASA | Gyldendal ASA vs. Medistim ASA |
| SeaBird Exploration vs. Aker ASA | SeaBird Exploration vs. Subsea 7 SA | SeaBird Exploration vs. Aker Solutions ASA | SeaBird Exploration vs. TGS NOPEC Geophysical |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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