Correlation Between Harboes Bryggeri and Agat Ejendomme

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

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

Diversification Opportunities for Harboes Bryggeri and Agat Ejendomme

0.29

Correlation Coefficient

Harboes Bryggeri  Agat Ejendomme

Modest diversification

The 3 months correlation between Harboes and Agat is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Harboes Bryggeri AS and Agat Ejendomme AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agat Ejendomme AS and Harboes Bryggeri 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 Harboes Bryggeri AS are associated (or correlated) with Agat Ejendomme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agat Ejendomme AS has no effect on the direction of Harboes Bryggeri i.e., Harboes Bryggeri and Agat Ejendomme go up and down completely randomly.

Pair Corralation between Harboes Bryggeri and Agat Ejendomme

Assuming the 90 days trading horizon Harboes Bryggeri AS is expected to generate 1.28 times more return on investment than Agat Ejendomme. However, Harboes Bryggeri is 1.28 times more volatile than Agat Ejendomme AS. It trades about 0.03 of its potential returns per unit of risk. Agat Ejendomme AS is currently generating about 0.0 per unit of risk. If you would invest  15,250  in Harboes Bryggeri AS on December 30, 2024 and sell it today you would earn a total of  250.00  from holding Harboes Bryggeri AS or generate 1.64% return on investment over 90 days.

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

Harboes Bryggeri AS  vs.  Agat Ejendomme AS

Harboes Bryggeri

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harboes Bryggeri AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Harboes Bryggeri may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Agat Ejendomme AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agat Ejendomme AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Agat Ejendomme is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Harboes Bryggeri and Agat Ejendomme

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

The idea behind Harboes Bryggeri AS and Agat Ejendomme 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.