Correlation Between GN Store and Glunz Jensen
Can any of the company-specific risk be diversified away by investing in both GN Store 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 GN Store and Glunz Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GN Store Nord and Glunz Jensen, you can compare the effects of market volatilities on GN Store 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 GN Store with a short position of Glunz Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GN Store and Glunz Jensen.
Diversification Opportunities for GN Store and Glunz Jensen
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GN Store and Glunz is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GN Store Nord and Glunz Jensen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glunz Jensen and GN Store 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 GN Store Nord 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 GN Store i.e., GN Store and Glunz Jensen go up and down completely randomly.
Pair Corralation between GN Store and Glunz Jensen
Assuming the 90 days horizon GN Store is expected to generate 3.51 times less return on investment than Glunz Jensen. But when comparing it to its historical volatility, GN Store Nord is 1.03 times less risky than Glunz Jensen. It trades about 0.02 of its potential returns per unit of risk. Glunz Jensen is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,950 in Glunz Jensen on September 4, 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GN Store Nord vs. Glunz Jensen
Performance |
| Timeline |
| GN Store Nord |
| Glunz Jensen |
GN Store and Glunz Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GN Store and Glunz Jensen
The main advantage of trading using opposite GN Store and Glunz Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GN Store 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.The idea behind GN Store Nord and Glunz Jensen 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.| Glunz Jensen vs. FLSmidth Co | Glunz Jensen vs. GN Store Nord | Glunz Jensen vs. Tryg AS | Glunz Jensen vs. Ambu 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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