Correlation Between Gabriel Holding and LUXOR-B

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

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

Diversification Opportunities for Gabriel Holding and LUXOR-B

0.16

Correlation Coefficient

Gabriel Holding  LUXOR-B

Average diversification

The 3 months correlation between Gabriel and LUXOR-B is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Gabriel Holding and Investeringsselskabet Luxor AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsselskabet 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 LUXOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsselskabet has no effect on the direction of Gabriel Holding i.e., Gabriel Holding and LUXOR-B go up and down completely randomly.

Pair Corralation between Gabriel Holding and LUXOR-B

Assuming the 90 days trading horizon Gabriel Holding is expected to under-perform the LUXOR-B. But the stock apears to be less risky and, when comparing its historical volatility, Gabriel Holding is 1.2 times less risky than LUXOR-B. The stock trades about -0.15 of its potential returns per unit of risk. The Investeringsselskabet Luxor AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  55,500  in Investeringsselskabet Luxor AS on December 2, 2024 and sell it today you would lose (2,000) from holding Investeringsselskabet Luxor AS or give up 3.6% of portfolio value over 90 days.

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

Gabriel Holding  vs.  Investeringsselskabet Luxor 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 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.

Investeringsselskabet

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gabriel Holding and LUXOR-B

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

The idea behind Gabriel Holding and Investeringsselskabet Luxor 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.