Correlation Between Arcticzymes Technologies and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Arcticzymes Technologies and Grong Sparebank 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 Arcticzymes Technologies and Grong Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcticzymes Technologies ASA and Grong Sparebank, you can compare the effects of market volatilities on Arcticzymes Technologies and Grong Sparebank 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 Arcticzymes Technologies with a short position of Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcticzymes Technologies and Grong Sparebank.
Diversification Opportunities for Arcticzymes Technologies and Grong Sparebank
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arcticzymes and Grong is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank and Arcticzymes Technologies 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 Arcticzymes Technologies ASA are associated (or correlated) with Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and Grong Sparebank go up and down completely randomly.
Pair Corralation between Arcticzymes Technologies and Grong Sparebank
Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to under-perform the Grong Sparebank. In addition to that, Arcticzymes Technologies is 2.76 times more volatile than Grong Sparebank. It trades about -0.16 of its total potential returns per unit of risk. Grong Sparebank is currently generating about 0.04 per unit of volatility. If you would invest 14,750 in Grong Sparebank on August 29, 2024 and sell it today you would earn a total of 246.00 from holding Grong Sparebank or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcticzymes Technologies ASA vs. Grong Sparebank
Performance |
| Timeline |
| Arcticzymes Technologies |
| Grong Sparebank |
Arcticzymes Technologies and Grong Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcticzymes Technologies and Grong Sparebank
The main advantage of trading using opposite Arcticzymes Technologies and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcticzymes Technologies position performs unexpectedly, Grong Sparebank 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron ASA |
| Grong Sparebank vs. DnB ASA | Grong Sparebank vs. Sparebank 1 SR | Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebanken Mre |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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