Correlation Between Gyldendal and HH International

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Can any of the company-specific risk be diversified away by investing in both Gyldendal and HH International 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 HH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gyldendal AS and HH International AS, you can compare the effects of market volatilities on Gyldendal and HH International 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 HH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gyldendal and HH International.

Diversification Opportunities for Gyldendal and HH International

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Gyldendal and HH International is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal AS and HH International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HH International 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 HH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HH International has no effect on the direction of Gyldendal i.e., Gyldendal and HH International go up and down completely randomly.

Pair Corralation between Gyldendal and HH International

Assuming the 90 days trading horizon Gyldendal AS is expected to generate 2.88 times more return on investment than HH International. However, Gyldendal is 2.88 times more volatile than HH International AS. It trades about -0.05 of its potential returns per unit of risk. HH International AS is currently generating about -0.14 per unit of risk. If you would invest  158,000  in Gyldendal AS on October 4, 2024 and sell it today you would lose (22,000) from holding Gyldendal AS or give up 13.92% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Gyldendal AS  vs.  HH International AS

 Performance 
       Timeline  
Gyldendal AS 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Gyldendal AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
HH International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HH International AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Gyldendal and HH International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gyldendal and HH International

The main advantage of trading using opposite Gyldendal and HH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gyldendal position performs unexpectedly, HH International 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 HH International will offset losses from the drop in HH International's long position.
The idea behind Gyldendal AS and HH International 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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