Correlation Between H Lundbeck and Groenlandsbanken
Can any of the company-specific risk be diversified away by investing in both H Lundbeck and Groenlandsbanken 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 H Lundbeck and Groenlandsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H Lundbeck AS and Groenlandsbanken AS, you can compare the effects of market volatilities on H Lundbeck and Groenlandsbanken 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 H Lundbeck with a short position of Groenlandsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of H Lundbeck and Groenlandsbanken.
Diversification Opportunities for H Lundbeck and Groenlandsbanken
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HLUN-B and Groenlandsbanken is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding H Lundbeck AS and Groenlandsbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groenlandsbanken and H Lundbeck 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 H Lundbeck AS are associated (or correlated) with Groenlandsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groenlandsbanken has no effect on the direction of H Lundbeck i.e., H Lundbeck and Groenlandsbanken go up and down completely randomly.
Pair Corralation between H Lundbeck and Groenlandsbanken
Assuming the 90 days trading horizon H Lundbeck AS is expected to under-perform the Groenlandsbanken. In addition to that, H Lundbeck is 1.99 times more volatile than Groenlandsbanken AS. It trades about -0.03 of its total potential returns per unit of risk. Groenlandsbanken AS is currently generating about 0.19 per unit of volatility. If you would invest 67,500 in Groenlandsbanken AS on September 1, 2024 and sell it today you would earn a total of 2,500 from holding Groenlandsbanken AS or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
H Lundbeck AS vs. Groenlandsbanken AS
Performance |
| Timeline |
| H Lundbeck AS |
| Groenlandsbanken |
H Lundbeck and Groenlandsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H Lundbeck and Groenlandsbanken
The main advantage of trading using opposite H Lundbeck and Groenlandsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H Lundbeck position performs unexpectedly, Groenlandsbanken 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 Groenlandsbanken will offset losses from the drop in Groenlandsbanken's long position.| H Lundbeck vs. H Lundbeck AS | H Lundbeck vs. GN Store Nord | H Lundbeck vs. FLSmidth Co | H Lundbeck vs. ALK Abell AS |
| Groenlandsbanken vs. Sydbank AS | Groenlandsbanken vs. Jyske Bank AS | Groenlandsbanken vs. Alm Brand | Groenlandsbanken 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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