Correlation Between Gyldendal and Flgger Group

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

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

Diversification Opportunities for Gyldendal and Flgger Group

-0.04

Correlation Coefficient

Gyldendal  Flgger Group

Good diversification

The 3 months correlation between Gyldendal and Flgger is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal AS and Flgger group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flgger group AS and Gyldendal 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 AS are associated (or correlated) with Flgger Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flgger group AS has no effect on the direction of Gyldendal i.e., Gyldendal and Flgger Group go up and down completely randomly.

Pair Corralation between Gyldendal and Flgger Group

Assuming the 90 days trading horizon Gyldendal AS is expected to generate 3.3 times more return on investment than Flgger Group. However, Gyldendal is 3.3 times more volatile than Flgger group AS. It trades about 0.08 of its potential returns per unit of risk. Flgger group AS is currently generating about 0.03 per unit of risk. If you would invest  136,000  in Gyldendal AS on December 25, 2024 and sell it today you would earn a total of  25,000  from holding Gyldendal AS or generate 18.38% return on investment over 90 days.

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

Gyldendal AS  vs.  Flgger group AS

Gyldendal AS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gyldendal AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Gyldendal sustained solid returns over the last few months and may actually be approaching a breakup point.

Flgger group AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flgger group AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Flgger Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gyldendal and Flgger Group

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

The idea behind Gyldendal AS and Flgger group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.