Correlation Between Gyldendal and Kreditbanken

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

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

Diversification Opportunities for Gyldendal and Kreditbanken

0.76

Correlation Coefficient

Gyldendal  Kreditbanken

Poor diversification

The 3 months correlation between Gyldendal and Kreditbanken is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal AS and Kreditbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kreditbanken 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 Kreditbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kreditbanken AS has no effect on the direction of Gyldendal i.e., Gyldendal and Kreditbanken go up and down completely randomly.

Pair Corralation between Gyldendal and Kreditbanken

Assuming the 90 days trading horizon Gyldendal is expected to generate 2.28 times less return on investment than Kreditbanken. In addition to that, Gyldendal is 1.94 times more volatile than Kreditbanken AS. It trades about 0.06 of its total potential returns per unit of risk. Kreditbanken AS is currently generating about 0.26 per unit of volatility. If you would invest  515,000  in Kreditbanken AS on December 27, 2024 and sell it today you would earn a total of  150,000  from holding Kreditbanken AS or generate 29.13% return on investment over 90 days.

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

Gyldendal AS  vs.  Kreditbanken AS

Gyldendal AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gyldendal AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Gyldendal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kreditbanken AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kreditbanken AS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Kreditbanken displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gyldendal and Kreditbanken

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

The idea behind Gyldendal AS and Kreditbanken 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.