Correlation Between Groenlandsbanken and PFA Invest
Can any of the company-specific risk be diversified away by investing in both Groenlandsbanken and PFA Invest 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 PFA Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groenlandsbanken AS and PFA Invest Kreditobligationer, you can compare the effects of market volatilities on Groenlandsbanken and PFA Invest 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 PFA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and PFA Invest.
Diversification Opportunities for Groenlandsbanken and PFA Invest
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Groenlandsbanken and PFA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and PFA Invest Kreditobligationer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFA Invest Kreditobl 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 PFA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFA Invest Kreditobl has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and PFA Invest go up and down completely randomly.
Pair Corralation between Groenlandsbanken and PFA Invest
Assuming the 90 days trading horizon Groenlandsbanken AS is expected to generate 18.13 times more return on investment than PFA Invest. However, Groenlandsbanken is 18.13 times more volatile than PFA Invest Kreditobligationer. It trades about 0.2 of its potential returns per unit of risk. PFA Invest Kreditobligationer is currently generating about 0.01 per unit of risk. If you would invest 70,000 in Groenlandsbanken AS on October 29, 2024 and sell it today you would earn a total of 6,000 from holding Groenlandsbanken AS or generate 8.57% 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. PFA Invest Kreditobligationer
Performance |
| Timeline |
| Groenlandsbanken |
| PFA Invest Kreditobl |
Groenlandsbanken and PFA Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and PFA Invest
The main advantage of trading using opposite Groenlandsbanken and PFA Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, PFA Invest 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 PFA Invest will offset losses from the drop in PFA Invest's long position.| Groenlandsbanken vs. Skjern Bank AS | Groenlandsbanken vs. Lollands Bank | Groenlandsbanken vs. Ringkjoebing Landbobank AS | Groenlandsbanken vs. Kreditbanken AS |
| PFA Invest vs. Netcompany Group AS | PFA Invest vs. cBrain AS | PFA Invest vs. ALK Abell AS | PFA Invest vs. Green Hydrogen Systems |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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