Correlation Between GN Store and Zealand Pharma
Can any of the company-specific risk be diversified away by investing in both GN Store and Zealand Pharma 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 Zealand Pharma 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 Zealand Pharma AS, you can compare the effects of market volatilities on GN Store and Zealand Pharma 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 Zealand Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of GN Store and Zealand Pharma.
Diversification Opportunities for GN Store and Zealand Pharma
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GN Store and Zealand is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding GN Store Nord and Zealand Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zealand Pharma AS 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 Zealand Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zealand Pharma AS has no effect on the direction of GN Store i.e., GN Store and Zealand Pharma go up and down completely randomly.
Pair Corralation between GN Store and Zealand Pharma
Assuming the 90 days horizon GN Store is expected to generate 64.15 times less return on investment than Zealand Pharma. But when comparing it to its historical volatility, GN Store Nord is 1.21 times less risky than Zealand Pharma. It trades about 0.0 of its potential returns per unit of risk. Zealand Pharma AS is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 20,140 in Zealand Pharma AS on September 19, 2024 and sell it today you would earn a total of 60,110 from holding Zealand Pharma AS or generate 298.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GN Store Nord vs. Zealand Pharma AS
Performance |
| Timeline |
| GN Store Nord |
| Zealand Pharma AS |
GN Store and Zealand Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GN Store and Zealand Pharma
The main advantage of trading using opposite GN Store and Zealand Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GN Store position performs unexpectedly, Zealand Pharma 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 Zealand Pharma will offset losses from the drop in Zealand Pharma's long position.| GN Store vs. Dataproces Group AS | GN Store vs. cBrain AS | GN Store vs. Nilfisk Holding AS | GN Store vs. Danish Aerospace |
| Zealand Pharma vs. Ambu AS | Zealand Pharma vs. DSV Panalpina AS | Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. GN Store Nord |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| CEOs Directory Screen CEOs from public companies around the world |