Correlation Between Groenlandsbanken and Dataproces Group
Can any of the company-specific risk be diversified away by investing in both Groenlandsbanken and Dataproces Group 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 Dataproces Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groenlandsbanken AS and Dataproces Group AS, you can compare the effects of market volatilities on Groenlandsbanken and Dataproces Group 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 Dataproces Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and Dataproces Group.
Diversification Opportunities for Groenlandsbanken and Dataproces Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Groenlandsbanken and Dataproces is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group 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 Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and Dataproces Group go up and down completely randomly.
Pair Corralation between Groenlandsbanken and Dataproces Group
Assuming the 90 days trading horizon Groenlandsbanken is expected to generate 5.7 times less return on investment than Dataproces Group. But when comparing it to its historical volatility, Groenlandsbanken AS is 3.06 times less risky than Dataproces Group. It trades about 0.04 of its potential returns per unit of risk. Dataproces Group AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 196.00 in Dataproces Group AS on August 28, 2024 and sell it today you would earn a total of 369.00 from holding Dataproces Group AS or generate 188.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groenlandsbanken AS vs. Dataproces Group AS
Performance |
| Timeline |
| Groenlandsbanken |
| Dataproces Group |
Groenlandsbanken and Dataproces Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and Dataproces Group
The main advantage of trading using opposite Groenlandsbanken and Dataproces Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, Dataproces Group 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 Dataproces Group will offset losses from the drop in Dataproces Group's long position.| Groenlandsbanken vs. Dataproces Group AS | Groenlandsbanken vs. cBrain AS | Groenlandsbanken vs. ALK Abell AS | Groenlandsbanken vs. ChemoMetec AS |
| Dataproces Group vs. Penneo AS | Dataproces Group vs. Bactiquant AS | Dataproces Group vs. cBrain AS | Dataproces Group vs. FOM Technologies 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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