Correlation Between Grong Sparebank and Tekna Holding
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank and Tekna Holding 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 Grong Sparebank and Tekna Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and Tekna Holding AS, you can compare the effects of market volatilities on Grong Sparebank and Tekna Holding 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 Grong Sparebank with a short position of Tekna Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Tekna Holding.
Diversification Opportunities for Grong Sparebank and Tekna Holding
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grong and Tekna is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank and Tekna Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekna Holding AS and Grong Sparebank 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 Grong Sparebank are associated (or correlated) with Tekna Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekna Holding AS has no effect on the direction of Grong Sparebank i.e., Grong Sparebank and Tekna Holding go up and down completely randomly.
Pair Corralation between Grong Sparebank and Tekna Holding
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 0.31 times more return on investment than Tekna Holding. However, Grong Sparebank is 3.2 times less risky than Tekna Holding. It trades about 0.04 of its potential returns per unit of risk. Tekna Holding AS is currently generating about -0.06 per unit of risk. If you would invest 13,446 in Grong Sparebank on September 14, 2024 and sell it today you would earn a total of 1,722 from holding Grong Sparebank or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Grong Sparebank vs. Tekna Holding AS
Performance |
| Timeline |
| Grong Sparebank |
| Tekna Holding AS |
Grong Sparebank and Tekna Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Tekna Holding
The main advantage of trading using opposite Grong Sparebank and Tekna Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank position performs unexpectedly, Tekna Holding 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 Tekna Holding will offset losses from the drop in Tekna Holding's long position.| Grong Sparebank vs. Pareto Bank ASA | Grong Sparebank vs. Morrow Bank ASA | Grong Sparebank vs. Bien Sparebank ASA | Grong Sparebank vs. Skue Sparebank |
| Tekna Holding vs. Vow Green Metals | Tekna Holding vs. Nordic Technology Group | Tekna Holding vs. Aasen Sparebank | Tekna Holding vs. Waste Plastic Upcycling |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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