Correlation Between Gyldendal and Harboes Bryggeri

Can any of the company-specific risk be diversified away by investing in both Gyldendal and Harboes Bryggeri 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 and Harboes Bryggeri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gyldendal AS and Harboes Bryggeri AS, you can compare the effects of market volatilities on Gyldendal and Harboes Bryggeri 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 with a short position of Harboes Bryggeri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gyldendal and Harboes Bryggeri.

Diversification Opportunities for Gyldendal and Harboes Bryggeri

-0.76

Correlation Coefficient

Gyldendal  Harboes Bryggeri

Pay attention - limited upside

The 3 months correlation between Gyldendal and Harboes is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal AS and Harboes Bryggeri AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harboes Bryggeri and Gyldendal 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 AS are associated (or correlated) with Harboes Bryggeri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harboes Bryggeri has no effect on the direction of Gyldendal i.e., Gyldendal and Harboes Bryggeri go up and down completely randomly.

Pair Corralation between Gyldendal and Harboes Bryggeri

Assuming the 90 days trading horizon Gyldendal AS is expected to under-perform the Harboes Bryggeri. But the stock apears to be less risky and, when comparing its historical volatility, Gyldendal AS is 2.2 times less risky than Harboes Bryggeri. The stock trades about -0.04 of its potential returns per unit of risk. The Harboes Bryggeri AS is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest  6,700  in Harboes Bryggeri AS on February 5, 2024 and sell it today you would earn a total of  5,600  from holding Harboes Bryggeri AS or generate 83.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Gyldendal AS  vs.  Harboes Bryggeri AS

Gyldendal AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gyldendal AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Gyldendal is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Harboes Bryggeri

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Harboes Bryggeri AS are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Harboes Bryggeri sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gyldendal and Harboes Bryggeri

The main advantage of trading using opposite Gyldendal and Harboes Bryggeri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gyldendal position performs unexpectedly, Harboes Bryggeri 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 Harboes Bryggeri will offset losses from the drop in Harboes Bryggeri's long position.

The idea behind Gyldendal AS and Harboes Bryggeri AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.