Correlation Between Harboes Bryggeri and Jeudan

Can any of the company-specific risk be diversified away by investing in both Harboes Bryggeri and Jeudan 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 Jeudan 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 Jeudan, you can compare the effects of market volatilities on Harboes Bryggeri and Jeudan 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 Jeudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harboes Bryggeri and Jeudan.

Diversification Opportunities for Harboes Bryggeri and Jeudan

0.12

Correlation Coefficient

Harboes Bryggeri  Jeudan

Average diversification

The 3 months correlation between Harboes and Jeudan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Harboes Bryggeri AS and Jeudan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeudan 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 Jeudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeudan has no effect on the direction of Harboes Bryggeri i.e., Harboes Bryggeri and Jeudan go up and down completely randomly.

Pair Corralation between Harboes Bryggeri and Jeudan

Assuming the 90 days trading horizon Harboes Bryggeri AS is expected to under-perform the Jeudan. In addition to that, Harboes Bryggeri is 2.63 times more volatile than Jeudan. It trades about -0.09 of its total potential returns per unit of risk. Jeudan is currently generating about -0.24 per unit of volatility. If you would invest  24,100  in Jeudan on October 21, 2024 and sell it today you would lose (3,800) from holding Jeudan or give up 15.77% of portfolio value over 90 days.

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

Harboes Bryggeri AS  vs.  Jeudan

Harboes Bryggeri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harboes Bryggeri AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jeudan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jeudan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Harboes Bryggeri and Jeudan

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

The idea behind Harboes Bryggeri AS and Jeudan 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.