Correlation Between Groenlandsbanken and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Groenlandsbanken and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groenlandsbanken AS and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Groenlandsbanken and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and PARKEN Sport.
Diversification Opportunities for Groenlandsbanken and PARKEN Sport
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Groenlandsbanken and PARKEN is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and PARKEN Sport go up and down completely randomly.
Pair Corralation between Groenlandsbanken and PARKEN Sport
Assuming the 90 days trading horizon Groenlandsbanken AS is expected to generate 0.46 times more return on investment than PARKEN Sport. However, Groenlandsbanken AS is 2.18 times less risky than PARKEN Sport. It trades about 0.27 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about -0.07 per unit of risk. If you would invest 66,500 in Groenlandsbanken AS on August 29, 2024 and sell it today you would earn a total of 2,500 from holding Groenlandsbanken AS or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Groenlandsbanken AS vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Groenlandsbanken |
| PARKEN Sport Enterta |
Groenlandsbanken and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and PARKEN Sport
The main advantage of trading using opposite Groenlandsbanken and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Groenlandsbanken vs. Sydbank AS | Groenlandsbanken vs. Jyske Bank AS | Groenlandsbanken vs. Alm Brand | Groenlandsbanken vs. Nordea Bank Abp |
| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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