Correlation Between Newcap Holding and Gabriel Holding
Can any of the company-specific risk be diversified away by investing in both Newcap Holding 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 Newcap Holding and Gabriel Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcap Holding AS and Gabriel Holding, you can compare the effects of market volatilities on Newcap Holding 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 Newcap Holding with a short position of Gabriel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcap Holding and Gabriel Holding.
Diversification Opportunities for Newcap Holding and Gabriel Holding
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Newcap and Gabriel is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Newcap Holding AS and Gabriel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabriel Holding and Newcap Holding 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 Newcap Holding 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 Newcap Holding i.e., Newcap Holding and Gabriel Holding go up and down completely randomly.
Pair Corralation between Newcap Holding and Gabriel Holding
Assuming the 90 days trading horizon Newcap Holding AS is expected to generate 0.77 times more return on investment than Gabriel Holding. However, Newcap Holding AS is 1.29 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 9.40 in Newcap Holding AS on September 3, 2024 and sell it today you would earn a total of 0.40 from holding Newcap Holding AS or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newcap Holding AS vs. Gabriel Holding
Performance |
| Timeline |
| Newcap Holding AS |
| Gabriel Holding |
Newcap Holding and Gabriel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcap Holding and Gabriel Holding
The main advantage of trading using opposite Newcap Holding and Gabriel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcap Holding 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.| Newcap Holding vs. SKAKO AS | Newcap Holding vs. Lollands Bank | Newcap Holding vs. Scandinavian Brake Systems | Newcap Holding vs. Rovsing 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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