Correlation Between Prime Office and Groenlandsbanken
Can any of the company-specific risk be diversified away by investing in both Prime Office 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 Prime Office and Groenlandsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Office AS and Groenlandsbanken AS, you can compare the effects of market volatilities on Prime Office 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 Prime Office with a short position of Groenlandsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Office and Groenlandsbanken.
Diversification Opportunities for Prime Office and Groenlandsbanken
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prime and Groenlandsbanken is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Prime Office AS and Groenlandsbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groenlandsbanken and Prime Office 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 Prime Office 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 Prime Office i.e., Prime Office and Groenlandsbanken go up and down completely randomly.
Pair Corralation between Prime Office and Groenlandsbanken
Assuming the 90 days trading horizon Prime Office AS is expected to under-perform the Groenlandsbanken. In addition to that, Prime Office is 1.9 times more volatile than Groenlandsbanken AS. It trades about -0.02 of its total potential returns per unit of risk. Groenlandsbanken AS is currently generating about 0.04 per unit of volatility. If you would invest 62,000 in Groenlandsbanken AS on August 25, 2024 and sell it today you would earn a total of 7,000 from holding Groenlandsbanken AS or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Office AS vs. Groenlandsbanken AS
Performance |
| Timeline |
| Prime Office AS |
| Groenlandsbanken |
Prime Office and Groenlandsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Office and Groenlandsbanken
The main advantage of trading using opposite Prime Office and Groenlandsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Office 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.| Prime Office vs. BioPorto | Prime Office vs. Newcap Holding AS | Prime Office vs. Agat Ejendomme AS | Prime Office vs. PF Atlantic Petroleum |
| Groenlandsbanken vs. Dataproces Group AS | Groenlandsbanken vs. cBrain AS | Groenlandsbanken vs. ALK Abell AS | Groenlandsbanken vs. ChemoMetec 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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