Correlation Between Gabriel Holding and Bavarian Nordic

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

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

Diversification Opportunities for Gabriel Holding and Bavarian Nordic

0.71

Correlation Coefficient

Gabriel Holding  Bavarian Nordic

Poor diversification

The 3 months correlation between Gabriel and Bavarian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gabriel Holding and Bavarian Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bavarian Nordic and Gabriel 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 Gabriel Holding are associated (or correlated) with Bavarian Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bavarian Nordic has no effect on the direction of Gabriel Holding i.e., Gabriel Holding and Bavarian Nordic go up and down completely randomly.

Pair Corralation between Gabriel Holding and Bavarian Nordic

Assuming the 90 days trading horizon Gabriel Holding is expected to generate 1.28 times more return on investment than Bavarian Nordic. However, Gabriel Holding is 1.28 times more volatile than Bavarian Nordic. It trades about -0.11 of its potential returns per unit of risk. Bavarian Nordic is currently generating about -0.16 per unit of risk. If you would invest  18,100  in Gabriel Holding on December 2, 2024 and sell it today you would lose (2,500) from holding Gabriel Holding or give up 13.81% of portfolio value over 90 days.

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

Gabriel Holding  vs.  Bavarian Nordic

Gabriel Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gabriel Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bavarian Nordic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bavarian Nordic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Gabriel Holding and Bavarian Nordic

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

The idea behind Gabriel Holding and Bavarian Nordic 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..