Correlation Between Gyldendal ASA and Schibsted ASA

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

By analyzing existing cross correlation between Gyldendal ASA and Schibsted ASA B, you can compare the effects of market volatilities on Gyldendal ASA and Schibsted ASA 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 Gyldendal ASA with a short position of Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gyldendal ASA and Schibsted ASA.

Diversification Opportunities for Gyldendal ASA and Schibsted ASA

0.44

Correlation Coefficient

Gyldendal ASA  Schibsted ASA

Very weak diversification

The 3 months correlation between Gyldendal and Schibsted is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal ASA and Schibsted ASA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA B and Gyldendal ASA 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 Gyldendal ASA are associated (or correlated) with Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA B has no effect on the direction of Gyldendal ASA i.e., Gyldendal ASA and Schibsted ASA go up and down completely randomly.

Pair Corralation between Gyldendal ASA and Schibsted ASA

Assuming the 90 days trading horizon Gyldendal ASA is expected to generate 1.05 times more return on investment than Schibsted ASA. However, Gyldendal ASA is 1.05 times more volatile than Schibsted ASA B. It trades about -0.02 of its potential returns per unit of risk. Schibsted ASA B is currently generating about -0.15 per unit of risk. If you would invest  39,400  in Gyldendal ASA on December 30, 2024 and sell it today you would lose (1,400) from holding Gyldendal ASA or give up 3.55% of portfolio value over 90 days.

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

Gyldendal ASA  vs.  Schibsted ASA B

Gyldendal ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gyldendal ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Gyldendal ASA is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Schibsted ASA B

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schibsted ASA B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Gyldendal ASA and Schibsted ASA

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

The idea behind Gyldendal ASA and Schibsted ASA B 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.