Correlation Between Matas AS and GN Store
Can any of the company-specific risk be diversified away by investing in both Matas AS and GN Store 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 Matas AS and GN Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matas AS and GN Store Nord, you can compare the effects of market volatilities on Matas AS and GN Store 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 Matas AS with a short position of GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matas AS and GN Store.
Diversification Opportunities for Matas AS and GN Store
Very good diversification
The 3 months correlation between Matas and GN Store is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and GN Store Nord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GN Store Nord and Matas AS 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 Matas AS are associated (or correlated) with GN Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GN Store Nord has no effect on the direction of Matas AS i.e., Matas AS and GN Store go up and down completely randomly.
Pair Corralation between Matas AS and GN Store
Assuming the 90 days trading horizon Matas AS is expected to under-perform the GN Store. But the stock apears to be less risky and, when comparing its historical volatility, Matas AS is 1.24 times less risky than GN Store. The stock trades about -0.05 of its potential returns per unit of risk. The GN Store Nord is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13,435 in GN Store Nord on August 25, 2024 and sell it today you would earn a total of 60.00 from holding GN Store Nord or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Matas AS vs. GN Store Nord
Performance |
| Timeline |
| Matas AS |
| GN Store Nord |
Matas AS and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matas AS and GN Store
The main advantage of trading using opposite Matas AS and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matas AS position performs unexpectedly, GN Store 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 GN Store will offset losses from the drop in GN Store's long position.The idea behind Matas AS and GN Store Nord pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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