Correlation Between Groenlandsbanken and Aquaporin
Can any of the company-specific risk be diversified away by investing in both Groenlandsbanken and Aquaporin 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 Groenlandsbanken and Aquaporin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groenlandsbanken AS and Aquaporin AS, you can compare the effects of market volatilities on Groenlandsbanken and Aquaporin 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 Groenlandsbanken with a short position of Aquaporin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and Aquaporin.
Diversification Opportunities for Groenlandsbanken and Aquaporin
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Groenlandsbanken and Aquaporin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and Aquaporin AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquaporin AS and Groenlandsbanken 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 Groenlandsbanken AS are associated (or correlated) with Aquaporin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquaporin AS has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and Aquaporin go up and down completely randomly.
Pair Corralation between Groenlandsbanken and Aquaporin
Assuming the 90 days trading horizon Groenlandsbanken is expected to generate 1.34 times less return on investment than Aquaporin. But when comparing it to its historical volatility, Groenlandsbanken AS is 3.02 times less risky than Aquaporin. It trades about 0.3 of its potential returns per unit of risk. Aquaporin AS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,585 in Aquaporin AS on October 26, 2024 and sell it today you would earn a total of 210.00 from holding Aquaporin AS or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groenlandsbanken AS vs. Aquaporin AS
Performance |
| Timeline |
| Groenlandsbanken |
| Aquaporin AS |
Groenlandsbanken and Aquaporin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and Aquaporin
The main advantage of trading using opposite Groenlandsbanken and Aquaporin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, Aquaporin 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 Aquaporin will offset losses from the drop in Aquaporin's long position.| Groenlandsbanken vs. Skjern Bank AS | Groenlandsbanken vs. Lollands Bank | Groenlandsbanken vs. Ringkjoebing Landbobank AS | Groenlandsbanken vs. Kreditbanken AS |
| Aquaporin vs. Green Hydrogen Systems | Aquaporin vs. FOM Technologies AS | Aquaporin vs. ALK Abell AS | Aquaporin vs. Trifork Holding AG |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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