Correlation Between LED IBond and Gyldendal

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

By analyzing existing cross correlation between LED iBond International and Gyldendal AS, you can compare the effects of market volatilities on LED IBond and Gyldendal 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 LED IBond with a short position of Gyldendal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LED IBond and Gyldendal.

Diversification Opportunities for LED IBond and Gyldendal

-0.45

Correlation Coefficient

LED IBond  Gyldendal

Very good diversification

The 3 months correlation between LED and Gyldendal is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LED iBond International and Gyldendal AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyldendal AS and LED IBond 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 LED iBond International are associated (or correlated) with Gyldendal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyldendal AS has no effect on the direction of LED IBond i.e., LED IBond and Gyldendal go up and down completely randomly.

Pair Corralation between LED IBond and Gyldendal

Assuming the 90 days trading horizon LED iBond International is expected to generate 3.28 times more return on investment than Gyldendal. However, LED IBond is 3.28 times more volatile than Gyldendal AS. It trades about 0.04 of its potential returns per unit of risk. Gyldendal AS is currently generating about 0.01 per unit of risk. If you would invest  43.00  in LED iBond International on October 4, 2024 and sell it today you would lose (12.00) from holding LED iBond International or give up 27.91% of portfolio value over 90 days.

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

LED iBond International  vs.  Gyldendal AS

LED iBond International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LED iBond International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental drivers, LED IBond displayed solid returns over the last few months and may actually be approaching a breakup point.

Gyldendal AS

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with LED IBond and Gyldendal

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

The idea behind LED iBond International and Gyldendal 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.

Check out your portfolio center.

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.