Correlation Between Romsdal Sparebank and Gyldendal ASA
Can any of the company-specific risk be diversified away by investing in both Romsdal Sparebank and Gyldendal 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 Romsdal Sparebank and Gyldendal ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Romsdal Sparebank and Gyldendal ASA, you can compare the effects of market volatilities on Romsdal Sparebank and Gyldendal 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 Romsdal Sparebank with a short position of Gyldendal ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romsdal Sparebank and Gyldendal ASA.
Diversification Opportunities for Romsdal Sparebank and Gyldendal ASA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Romsdal and Gyldendal is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Romsdal Sparebank and Gyldendal ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyldendal ASA and Romsdal Sparebank 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 Romsdal Sparebank are associated (or correlated) with Gyldendal ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyldendal ASA has no effect on the direction of Romsdal Sparebank i.e., Romsdal Sparebank and Gyldendal ASA go up and down completely randomly.
Pair Corralation between Romsdal Sparebank and Gyldendal ASA
Assuming the 90 days trading horizon Romsdal Sparebank is expected to generate 0.16 times more return on investment than Gyldendal ASA. However, Romsdal Sparebank is 6.21 times less risky than Gyldendal ASA. It trades about 0.34 of its potential returns per unit of risk. Gyldendal ASA is currently generating about -0.07 per unit of risk. If you would invest 12,200 in Romsdal Sparebank on August 29, 2024 and sell it today you would earn a total of 196.00 from holding Romsdal Sparebank or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Romsdal Sparebank vs. Gyldendal ASA
Performance |
| Timeline |
| Romsdal Sparebank |
| Gyldendal ASA |
Romsdal Sparebank and Gyldendal ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Romsdal Sparebank and Gyldendal ASA
The main advantage of trading using opposite Romsdal Sparebank and Gyldendal ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Romsdal Sparebank position performs unexpectedly, Gyldendal 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 Gyldendal ASA will offset losses from the drop in Gyldendal ASA's long position.| Romsdal Sparebank vs. Elkem ASA | Romsdal Sparebank vs. DNB NOR KAPFORV | Romsdal Sparebank vs. Integrated Wind Solutions | Romsdal Sparebank vs. Vow ASA |
| Gyldendal ASA vs. Arendals Fossekompani ASA | Gyldendal ASA vs. Byggma | Gyldendal ASA vs. AF Gruppen ASA | Gyldendal ASA vs. Medistim 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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