Correlation Between Gyldendal and Laan Spar

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

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

Diversification Opportunities for Gyldendal and Laan Spar

0.69

Correlation Coefficient

Gyldendal  Laan Spar

Poor diversification

The 3 months correlation between Gyldendal and Laan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gyldendal AS and Laan Spar Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laan Spar Bank 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 Laan Spar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laan Spar Bank has no effect on the direction of Gyldendal i.e., Gyldendal and Laan Spar go up and down completely randomly.

Pair Corralation between Gyldendal and Laan Spar

Assuming the 90 days trading horizon Gyldendal is expected to generate 1.32 times less return on investment than Laan Spar. In addition to that, Gyldendal is 2.88 times more volatile than Laan Spar Bank. It trades about 0.05 of its total potential returns per unit of risk. Laan Spar Bank is currently generating about 0.18 per unit of volatility. If you would invest  69,500  in Laan Spar Bank on December 25, 2024 and sell it today you would earn a total of  8,500  from holding Laan Spar Bank or generate 12.23% 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.  Laan Spar Bank

Gyldendal AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gyldendal AS are ranked lower than 3 (%) 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.

Laan Spar Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Laan Spar Bank are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Laan Spar may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gyldendal and Laan Spar

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

The idea behind Gyldendal AS and Laan Spar Bank 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..