Correlation Between GSD Holding and Hedef Holdings

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

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

Diversification Opportunities for GSD Holding and Hedef Holdings

0.03

Correlation Coefficient

GSD Holding  Hedef Holdings

Significant diversification

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

Pair Corralation between GSD Holding and Hedef Holdings

Assuming the 90 days trading horizon GSD Holding AS is expected to under-perform the Hedef Holdings. But the stock apears to be less risky and, when comparing its historical volatility, GSD Holding AS is 1.19 times less risky than Hedef Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The Hedef Holdings AS is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  296.00  in Hedef Holdings AS on September 21, 2024 and sell it today you would earn a total of  17.00  from holding Hedef Holdings AS or generate 5.74% return on investment over 90 days.

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

GSD Holding AS  vs.  Hedef Holdings AS

GSD Holding AS

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days GSD Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, GSD Holding is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Hedef Holdings AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hedef Holdings AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with GSD Holding and Hedef Holdings

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

The idea behind GSD Holding AS and Hedef Holdings 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.