Correlation Between Gabriel Holding and Harboes Bryggeri

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

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

Diversification Opportunities for Gabriel Holding and Harboes Bryggeri

0.54

Correlation Coefficient

Gabriel Holding  Harboes Bryggeri

Very weak diversification

The 3 months correlation between Gabriel and Harboes is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gabriel Holding and Harboes Bryggeri AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harboes Bryggeri 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 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 Gabriel Holding i.e., Gabriel Holding and Harboes Bryggeri go up and down completely randomly.

Pair Corralation between Gabriel Holding and Harboes Bryggeri

Assuming the 90 days trading horizon Gabriel Holding is expected to under-perform the Harboes Bryggeri. In addition to that, Gabriel Holding is 1.0 times more volatile than Harboes Bryggeri AS. It trades about -0.17 of its total potential returns per unit of risk. Harboes Bryggeri AS is currently generating about -0.01 per unit of volatility. If you would invest  18,300  in Harboes Bryggeri AS on December 3, 2024 and sell it today you would lose (650.00) from holding Harboes Bryggeri AS or give up 3.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Gabriel Holding  vs.  Harboes Bryggeri 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 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.

Harboes Bryggeri

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gabriel Holding and Harboes Bryggeri

The main advantage of trading using opposite Gabriel Holding and Harboes Bryggeri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabriel Holding 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 Gabriel Holding 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.