Correlation Between Groenlandsbanken and LUXOR-B
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By analyzing existing cross correlation between Groenlandsbanken AS and Investeringsselskabet Luxor AS, you can compare the effects of market volatilities on Groenlandsbanken and LUXOR-B 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 LUXOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and LUXOR-B.
Diversification Opportunities for Groenlandsbanken and LUXOR-B
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groenlandsbanken and LUXOR-B is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and Investeringsselskabet Luxor AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsselskabet 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 LUXOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsselskabet has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and LUXOR-B go up and down completely randomly.
Pair Corralation between Groenlandsbanken and LUXOR-B
Assuming the 90 days trading horizon Groenlandsbanken AS is expected to generate 0.82 times more return on investment than LUXOR-B. However, Groenlandsbanken AS is 1.21 times less risky than LUXOR-B. It trades about 0.31 of its potential returns per unit of risk. Investeringsselskabet Luxor AS is currently generating about 0.22 per unit of risk. If you would invest 70,000 in Groenlandsbanken AS on October 25, 2024 and sell it today you would earn a total of 8,500 from holding Groenlandsbanken AS or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Groenlandsbanken AS vs. Investeringsselskabet Luxor AS
Performance |
| Timeline |
| Groenlandsbanken |
| Investeringsselskabet |
Groenlandsbanken and LUXOR-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and LUXOR-B
The main advantage of trading using opposite Groenlandsbanken and LUXOR-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, LUXOR-B 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 LUXOR-B will offset losses from the drop in LUXOR-B's long position.| Groenlandsbanken vs. Skjern Bank AS | Groenlandsbanken vs. Lollands Bank | Groenlandsbanken vs. Ringkjoebing Landbobank AS | Groenlandsbanken vs. Kreditbanken AS |
| LUXOR-B vs. Skjern Bank AS | LUXOR-B vs. Groenlandsbanken AS | LUXOR-B vs. Fynske Bank AS | LUXOR-B vs. Lollands Bank |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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