Correlation Between BankInvest Value and Gyldendal

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

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

Diversification Opportunities for BankInvest Value and Gyldendal

-0.69

Correlation Coefficient

BankInvest Value  Gyldendal

Excellent diversification

The 3 months correlation between BankInvest and Gyldendal is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Value Globale and Gyldendal AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyldendal AS and BankInvest Value 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 BankInvest Value Globale are associated (or correlated) with Gyldendal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyldendal AS has no effect on the direction of BankInvest Value i.e., BankInvest Value and Gyldendal go up and down completely randomly.

Pair Corralation between BankInvest Value and Gyldendal

Assuming the 90 days trading horizon BankInvest Value Globale is expected to generate 0.19 times more return on investment than Gyldendal. However, BankInvest Value Globale is 5.32 times less risky than Gyldendal. It trades about 0.06 of its potential returns per unit of risk. Gyldendal AS is currently generating about -0.05 per unit of risk. If you would invest  10,130  in BankInvest Value Globale on October 4, 2024 and sell it today you would earn a total of  215.00  from holding BankInvest Value Globale or generate 2.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.67%
Values	Daily Returns

BankInvest Value Globale  vs.  Gyldendal AS

BankInvest Value Globale

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Value Globale are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BankInvest Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BankInvest Value and Gyldendal

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

The idea behind BankInvest Value Globale and Gyldendal 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.