Correlation Between GiG Software and New Nordic

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

By analyzing existing cross correlation between GiG Software PLC and New Nordic Healthbrands, you can compare the effects of market volatilities on GiG Software and New Nordic 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 GiG Software with a short position of New Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GiG Software and New Nordic.

Diversification Opportunities for GiG Software and New Nordic

-0.11

Correlation Coefficient

GiG Software  New Nordic

Good diversification

The 3 months correlation between GiG and New is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GiG Software PLC and New Nordic Healthbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Nordic Healthbrands and GiG Software 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 GiG Software PLC are associated (or correlated) with New Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Nordic Healthbrands has no effect on the direction of GiG Software i.e., GiG Software and New Nordic go up and down completely randomly.

Pair Corralation between GiG Software and New Nordic

Assuming the 90 days trading horizon GiG Software is expected to generate 1.38 times less return on investment than New Nordic. But when comparing it to its historical volatility, GiG Software PLC is 1.26 times less risky than New Nordic. It trades about 0.14 of its potential returns per unit of risk. New Nordic Healthbrands is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,430  in New Nordic Healthbrands on May 7, 2025 and sell it today you would earn a total of  1,230  from holding New Nordic Healthbrands or generate 86.01% return on investment over 90 days.

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

GiG Software PLC  vs.  New Nordic Healthbrands

GiG Software PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GiG Software PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GiG Software sustained solid returns over the last few months and may actually be approaching a breakup point.

New Nordic Healthbrands

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in New Nordic Healthbrands are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, New Nordic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GiG Software and New Nordic

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

The idea behind GiG Software PLC and New Nordic Healthbrands 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..