Correlation Between Veidekke ASA and Gjensidige Forsikring
Can any of the company-specific risk be diversified away by investing in both Veidekke ASA and Gjensidige Forsikring 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 Veidekke ASA and Gjensidige Forsikring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veidekke ASA and Gjensidige Forsikring ASA, you can compare the effects of market volatilities on Veidekke ASA and Gjensidige Forsikring 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 Veidekke ASA with a short position of Gjensidige Forsikring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veidekke ASA and Gjensidige Forsikring.
Diversification Opportunities for Veidekke ASA and Gjensidige Forsikring
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Veidekke and Gjensidige is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Veidekke ASA and Gjensidige Forsikring ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gjensidige Forsikring ASA and Veidekke 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 Veidekke ASA are associated (or correlated) with Gjensidige Forsikring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gjensidige Forsikring ASA has no effect on the direction of Veidekke ASA i.e., Veidekke ASA and Gjensidige Forsikring go up and down completely randomly.
Pair Corralation between Veidekke ASA and Gjensidige Forsikring
Assuming the 90 days trading horizon Veidekke ASA is expected to generate 1.2 times more return on investment than Gjensidige Forsikring. However, Veidekke ASA is 1.2 times more volatile than Gjensidige Forsikring ASA. It trades about 0.23 of its potential returns per unit of risk. Gjensidige Forsikring ASA is currently generating about -0.13 per unit of risk. If you would invest 12,460 in Veidekke ASA on August 24, 2024 and sell it today you would earn a total of 920.00 from holding Veidekke ASA or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veidekke ASA vs. Gjensidige Forsikring ASA
Performance |
| Timeline |
| Veidekke ASA |
| Gjensidige Forsikring ASA |
Veidekke ASA and Gjensidige Forsikring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veidekke ASA and Gjensidige Forsikring
The main advantage of trading using opposite Veidekke ASA and Gjensidige Forsikring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veidekke ASA position performs unexpectedly, Gjensidige Forsikring 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 Gjensidige Forsikring will offset losses from the drop in Gjensidige Forsikring's long position.| Veidekke ASA vs. AF Gruppen ASA | Veidekke ASA vs. Gjensidige Forsikring ASA | Veidekke ASA vs. Storebrand ASA | Veidekke ASA vs. Orkla ASA |
| Gjensidige Forsikring vs. DnB ASA | Gjensidige Forsikring vs. Storebrand ASA | Gjensidige Forsikring vs. Orkla ASA | Gjensidige Forsikring 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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