Correlation Between Netcompany Group and GN Store
Can any of the company-specific risk be diversified away by investing in both Netcompany Group 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 Netcompany Group and GN Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netcompany Group AS and GN Store Nord, you can compare the effects of market volatilities on Netcompany Group 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 Netcompany Group with a short position of GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netcompany Group and GN Store.
Diversification Opportunities for Netcompany Group and GN Store
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netcompany and GN Store is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Netcompany Group 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 Netcompany Group 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 Netcompany Group 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 Netcompany Group i.e., Netcompany Group and GN Store go up and down completely randomly.
Pair Corralation between Netcompany Group and GN Store
Assuming the 90 days trading horizon Netcompany Group AS is expected to generate 1.15 times more return on investment than GN Store. However, Netcompany Group is 1.15 times more volatile than GN Store Nord. It trades about 0.25 of its potential returns per unit of risk. GN Store Nord is currently generating about 0.01 per unit of risk. If you would invest 30,840 in Netcompany Group AS on August 29, 2024 and sell it today you would earn a total of 4,760 from holding Netcompany Group AS or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netcompany Group AS vs. GN Store Nord
Performance |
| Timeline |
| Netcompany Group |
| GN Store Nord |
Netcompany Group and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netcompany Group and GN Store
The main advantage of trading using opposite Netcompany Group and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netcompany Group 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.| Netcompany Group vs. Penneo AS | Netcompany Group vs. Bactiquant AS | Netcompany Group vs. cBrain AS | Netcompany Group vs. FOM Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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