Correlation Between First Farms and Glunz Jensen
Can any of the company-specific risk be diversified away by investing in both First Farms and Glunz Jensen 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 First Farms and Glunz Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Farms AS and Glunz Jensen, you can compare the effects of market volatilities on First Farms and Glunz Jensen 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 First Farms with a short position of Glunz Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Farms and Glunz Jensen.
Diversification Opportunities for First Farms and Glunz Jensen
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Glunz is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding First Farms AS and Glunz Jensen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glunz Jensen and First Farms 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 First Farms AS are associated (or correlated) with Glunz Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glunz Jensen has no effect on the direction of First Farms i.e., First Farms and Glunz Jensen go up and down completely randomly.
Pair Corralation between First Farms and Glunz Jensen
Assuming the 90 days trading horizon First Farms AS is expected to under-perform the Glunz Jensen. But the stock apears to be less risky and, when comparing its historical volatility, First Farms AS is 1.08 times less risky than Glunz Jensen. The stock trades about -0.01 of its potential returns per unit of risk. The Glunz Jensen is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,950 in Glunz Jensen on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Glunz Jensen or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Farms AS vs. Glunz Jensen
Performance |
| Timeline |
| First Farms AS |
| Glunz Jensen |
First Farms and Glunz Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Farms and Glunz Jensen
The main advantage of trading using opposite First Farms and Glunz Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Farms position performs unexpectedly, Glunz Jensen 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 Glunz Jensen will offset losses from the drop in Glunz Jensen's long position.| First Farms vs. HH International AS | First Farms vs. SKAKO AS | First Farms vs. Spar Nord Bank | First Farms vs. Matas AS |
| Glunz Jensen vs. First Farms AS | Glunz Jensen vs. SKAKO AS | Glunz Jensen vs. Rovsing AS | Glunz Jensen vs. Roblon AS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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