Correlation Between Danish Aerospace and GN Store
Can any of the company-specific risk be diversified away by investing in both Danish Aerospace and GN Store 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 Danish Aerospace and GN Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danish Aerospace and GN Store Nord, you can compare the effects of market volatilities on Danish Aerospace and GN Store 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 Danish Aerospace with a short position of GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danish Aerospace and GN Store.
Diversification Opportunities for Danish Aerospace and GN Store
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Danish and GN Store is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Danish Aerospace and GN Store Nord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GN Store Nord and Danish Aerospace 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 Danish Aerospace are associated (or correlated) with GN Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GN Store Nord has no effect on the direction of Danish Aerospace i.e., Danish Aerospace and GN Store go up and down completely randomly.
Pair Corralation between Danish Aerospace and GN Store
Assuming the 90 days trading horizon Danish Aerospace is expected to under-perform the GN Store. In addition to that, Danish Aerospace is 1.87 times more volatile than GN Store Nord. It trades about -0.04 of its total potential returns per unit of risk. GN Store Nord is currently generating about -0.07 per unit of volatility. If you would invest 13,140 in GN Store Nord on September 19, 2024 and sell it today you would lose (520.00) from holding GN Store Nord or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Danish Aerospace vs. GN Store Nord
Performance |
| Timeline |
| Danish Aerospace |
| GN Store Nord |
Danish Aerospace and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danish Aerospace and GN Store
The main advantage of trading using opposite Danish Aerospace and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danish Aerospace position performs unexpectedly, GN Store 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 GN Store will offset losses from the drop in GN Store's long position.| Danish Aerospace vs. BioPorto | Danish Aerospace vs. cBrain AS | Danish Aerospace vs. Orphazyme AS | Danish Aerospace vs. North Media AS |
| GN Store vs. Dataproces Group AS | GN Store vs. cBrain AS | GN Store vs. Nilfisk Holding AS | GN Store vs. Danish Aerospace |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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