Correlation Between Groenlandsbanken and Stenocare
Can any of the company-specific risk be diversified away by investing in both Groenlandsbanken and Stenocare 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 Stenocare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groenlandsbanken AS and Stenocare AS, you can compare the effects of market volatilities on Groenlandsbanken and Stenocare 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 Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and Stenocare.
Diversification Opportunities for Groenlandsbanken and Stenocare
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Groenlandsbanken and Stenocare is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare 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 Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and Stenocare go up and down completely randomly.
Pair Corralation between Groenlandsbanken and Stenocare
Assuming the 90 days trading horizon Groenlandsbanken AS is expected to generate 0.17 times more return on investment than Stenocare. However, Groenlandsbanken AS is 5.87 times less risky than Stenocare. It trades about 0.04 of its potential returns per unit of risk. Stenocare AS is currently generating about -0.05 per unit of risk. If you would invest 59,063 in Groenlandsbanken AS on November 5, 2024 and sell it today you would earn a total of 13,437 from holding Groenlandsbanken AS or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Groenlandsbanken AS vs. Stenocare AS
Performance |
| Timeline |
| Groenlandsbanken |
| Stenocare AS |
Groenlandsbanken and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and Stenocare
The main advantage of trading using opposite Groenlandsbanken and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare's long position.| Groenlandsbanken vs. Skjern Bank AS | Groenlandsbanken vs. Lollands Bank | Groenlandsbanken vs. Ringkjoebing Landbobank AS | Groenlandsbanken vs. Kreditbanken AS |
| Stenocare vs. Vestjysk Bank AS | Stenocare vs. Strategic Investments AS | Stenocare vs. Formuepleje Mix Medium | Stenocare vs. Nordea Bank Abp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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