Correlation Between Gabriel Holding and Penneo AS

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

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

Diversification Opportunities for Gabriel Holding and Penneo AS

-0.03

Correlation Coefficient

Gabriel Holding  Penneo AS

Good diversification

The 3 months correlation between Gabriel and Penneo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gabriel Holding and Penneo AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penneo 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 Penneo AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penneo AS has no effect on the direction of Gabriel Holding i.e., Gabriel Holding and Penneo AS go up and down completely randomly.

Pair Corralation between Gabriel Holding and Penneo AS

Assuming the 90 days trading horizon Gabriel Holding is expected to under-perform the Penneo AS. But the stock apears to be less risky and, when comparing its historical volatility, Gabriel Holding is 3.7 times less risky than Penneo AS. The stock trades about -0.14 of its potential returns per unit of risk. The Penneo AS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  890.00  in Penneo AS on September 3, 2024 and sell it today you would earn a total of  690.00  from holding Penneo AS or generate 77.53% return on investment over 90 days.

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

Gabriel Holding  vs.  Penneo AS

Gabriel Holding

Risk-Adjusted Performance

0 of 100

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Penneo AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penneo AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Penneo AS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gabriel Holding and Penneo AS

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

The idea behind Gabriel Holding and Penneo 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.