Correlation Between North Media and Gabriel Holding

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

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

Diversification Opportunities for North Media and Gabriel Holding

0.27

Correlation Coefficient

North Media  Gabriel Holding

Modest diversification

The 3 months correlation between North and Gabriel is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Gabriel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabriel Holding and North Media 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 North Media AS are associated (or correlated) with Gabriel Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabriel Holding has no effect on the direction of North Media i.e., North Media and Gabriel Holding go up and down completely randomly.

Pair Corralation between North Media and Gabriel Holding

Assuming the 90 days trading horizon North Media AS is expected to generate 0.64 times more return on investment than Gabriel Holding. However, North Media AS is 1.56 times less risky than Gabriel Holding. It trades about -0.01 of its potential returns per unit of risk. Gabriel Holding is currently generating about -0.15 per unit of risk. If you would invest  4,850  in North Media AS on December 2, 2024 and sell it today you would lose (80.00) from holding North Media AS or give up 1.65% of portfolio value over 90 days.

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

North Media AS  vs.  Gabriel Holding

North Media AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days North Media AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, North Media is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gabriel Holding

Risk-Adjusted Performance

Very Weak

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

Pair Trading with North Media and Gabriel Holding

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

The idea behind North Media AS and Gabriel Holding 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.