Correlation Between Stenocare and GN Store
Can any of the company-specific risk be diversified away by investing in both Stenocare 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 Stenocare and GN Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stenocare AS and GN Store Nord, you can compare the effects of market volatilities on Stenocare 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 Stenocare with a short position of GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stenocare and GN Store.
Diversification Opportunities for Stenocare and GN Store
Poor diversification
The 3 months correlation between Stenocare and GN Store is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Stenocare 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 Stenocare 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 Stenocare 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 Stenocare i.e., Stenocare and GN Store go up and down completely randomly.
Pair Corralation between Stenocare and GN Store
Assuming the 90 days trading horizon Stenocare AS is expected to under-perform the GN Store. In addition to that, Stenocare is 2.17 times more volatile than GN Store Nord. It trades about -0.03 of its total potential returns per unit of risk. GN Store Nord is currently generating about 0.01 per unit of volatility. If you would invest 14,800 in GN Store Nord on September 12, 2024 and sell it today you would lose (1,080) from holding GN Store Nord or give up 7.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stenocare AS vs. GN Store Nord
Performance |
| Timeline |
| Stenocare AS |
| GN Store Nord |
Stenocare and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stenocare and GN Store
The main advantage of trading using opposite Stenocare and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stenocare 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.| Stenocare vs. Bavarian Nordic | Stenocare vs. Investeringsselskabet Luxor AS | Stenocare vs. cBrain AS | Stenocare vs. Fast Ejendom |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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