Correlation Between Gabriel Holding and First Farms

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

By analyzing existing cross correlation between Gabriel Holding and First Farms AS, you can compare the effects of market volatilities on Gabriel Holding and First Farms 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 First Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabriel Holding and First Farms.

Diversification Opportunities for Gabriel Holding and First Farms

0.0

Correlation Coefficient

Gabriel Holding  First Farms

Pay attention - limited upside

The 3 months correlation between Gabriel and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gabriel Holding and First Farms AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Farms AS 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 First Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Farms AS has no effect on the direction of Gabriel Holding i.e., Gabriel Holding and First Farms go up and down completely randomly.

Pair Corralation between Gabriel Holding and First Farms

If you would invest  7,040  in First Farms AS on December 25, 2024 and sell it today you would earn a total of  1,340  from holding First Farms AS or generate 19.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gabriel Holding  vs.  First Farms AS

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 very healthy basic indicators, Gabriel Holding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

First Farms AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Farms AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, First Farms sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gabriel Holding and First Farms

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

The idea behind Gabriel Holding and First Farms 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.