Correlation Between Skjern Bank and Groenlandsbanken
Can any of the company-specific risk be diversified away by investing in both Skjern Bank 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 Skjern Bank and Groenlandsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skjern Bank AS and Groenlandsbanken AS, you can compare the effects of market volatilities on Skjern Bank 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 Skjern Bank with a short position of Groenlandsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and Groenlandsbanken.
Diversification Opportunities for Skjern Bank and Groenlandsbanken
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skjern and Groenlandsbanken is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and Groenlandsbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groenlandsbanken and Skjern Bank 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 Skjern Bank 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 Skjern Bank i.e., Skjern Bank and Groenlandsbanken go up and down completely randomly.
Pair Corralation between Skjern Bank and Groenlandsbanken
Assuming the 90 days trading horizon Skjern Bank AS is expected to generate 0.59 times more return on investment than Groenlandsbanken. However, Skjern Bank AS is 1.7 times less risky than Groenlandsbanken. It trades about 0.11 of its potential returns per unit of risk. Groenlandsbanken AS is currently generating about -0.04 per unit of risk. If you would invest 19,900 in Skjern Bank AS on November 18, 2024 and sell it today you would earn a total of 600.00 from holding Skjern Bank AS or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skjern Bank AS vs. Groenlandsbanken AS
Performance |
| Timeline |
| Skjern Bank AS |
| Groenlandsbanken |
Skjern Bank and Groenlandsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and Groenlandsbanken
The main advantage of trading using opposite Skjern Bank and Groenlandsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank 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.| Skjern Bank vs. Kreditbanken AS | Skjern Bank vs. Ringkjoebing Landbobank AS | Skjern Bank vs. Moens Bank AS | Skjern Bank vs. Laan Spar Bank |
| Groenlandsbanken vs. Skjern Bank AS | Groenlandsbanken vs. Lollands Bank | Groenlandsbanken vs. Ringkjoebing Landbobank AS | Groenlandsbanken vs. Kreditbanken 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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