Correlation Between Glunz Jensen and FOM Technologies

Can any of the company-specific risk be diversified away by investing in both Glunz Jensen and FOM Technologies 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 Glunz Jensen and FOM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glunz Jensen and FOM Technologies AS, you can compare the effects of market volatilities on Glunz Jensen and FOM Technologies 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 Glunz Jensen with a short position of FOM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glunz Jensen and FOM Technologies.

Diversification Opportunities for Glunz Jensen and FOM Technologies

-0.1

Correlation Coefficient

Glunz Jensen  FOM Technologies

Good diversification

The 3 months correlation between Glunz and FOM is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Glunz Jensen and FOM Technologies AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOM Technologies and Glunz Jensen 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 Glunz Jensen are associated (or correlated) with FOM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOM Technologies has no effect on the direction of Glunz Jensen i.e., Glunz Jensen and FOM Technologies go up and down completely randomly.

Pair Corralation between Glunz Jensen and FOM Technologies

Assuming the 90 days horizon Glunz Jensen is expected to generate 1.1 times more return on investment than FOM Technologies. However, Glunz Jensen is 1.1 times more volatile than FOM Technologies AS. It trades about 0.08 of its potential returns per unit of risk. FOM Technologies AS is currently generating about -0.2 per unit of risk. If you would invest  7,150  in Glunz Jensen on October 4, 2024 and sell it today you would earn a total of  300.00  from holding Glunz Jensen or generate 4.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Glunz Jensen  vs.  FOM Technologies AS

Glunz Jensen

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Glunz Jensen are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Glunz Jensen may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FOM Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FOM Technologies AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Glunz Jensen and FOM Technologies

The main advantage of trading using opposite Glunz Jensen and FOM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glunz Jensen position performs unexpectedly, FOM Technologies 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 FOM Technologies will offset losses from the drop in FOM Technologies' long position.

The idea behind Glunz Jensen and FOM Technologies AS 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.