Correlation Between Groenlandsbanken and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both Groenlandsbanken and TROPHY GAMES 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 TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groenlandsbanken AS and TROPHY GAMES Development, you can compare the effects of market volatilities on Groenlandsbanken and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and TROPHY GAMES.
Diversification Opportunities for Groenlandsbanken and TROPHY GAMES
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Groenlandsbanken and TROPHY is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and TROPHY GAMES Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES Development 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES Development has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and TROPHY GAMES go up and down completely randomly.
Pair Corralation between Groenlandsbanken and TROPHY GAMES
Assuming the 90 days trading horizon Groenlandsbanken is expected to generate 5.91 times less return on investment than TROPHY GAMES. But when comparing it to its historical volatility, Groenlandsbanken AS is 3.44 times less risky than TROPHY GAMES. It trades about 0.04 of its potential returns per unit of risk. TROPHY GAMES Development is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 421.00 in TROPHY GAMES Development on August 25, 2024 and sell it today you would earn a total of 309.00 from holding TROPHY GAMES Development or generate 73.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groenlandsbanken AS vs. TROPHY GAMES Development
Performance |
| Timeline |
| Groenlandsbanken |
| TROPHY GAMES Development |
Groenlandsbanken and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and TROPHY GAMES
The main advantage of trading using opposite Groenlandsbanken and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| Groenlandsbanken vs. Dataproces Group AS | Groenlandsbanken vs. cBrain AS | Groenlandsbanken vs. ALK Abell AS | Groenlandsbanken vs. ChemoMetec AS |
| TROPHY GAMES vs. North Media AS | TROPHY GAMES vs. Bactiquant AS | TROPHY GAMES vs. FOM Technologies AS | TROPHY GAMES vs. MapsPeople 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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