Correlation Between Glunz Jensen and SKAKO AS

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

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

Diversification Opportunities for Glunz Jensen and SKAKO AS

0.26

Correlation Coefficient

Glunz Jensen  SKAKO AS

Modest diversification

The 3 months correlation between Glunz and SKAKO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Glunz Jensen and SKAKO AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAKO AS 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 SKAKO AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAKO AS has no effect on the direction of Glunz Jensen i.e., Glunz Jensen and SKAKO AS go up and down completely randomly.

Pair Corralation between Glunz Jensen and SKAKO AS

Assuming the 90 days horizon Glunz Jensen is expected to generate 1.5 times more return on investment than SKAKO AS. However, Glunz Jensen is 1.5 times more volatile than SKAKO AS. It trades about -0.04 of its potential returns per unit of risk. SKAKO AS is currently generating about -0.1 per unit of risk. If you would invest  7,450  in Glunz Jensen on December 29, 2024 and sell it today you would lose (650.00) from holding Glunz Jensen or give up 8.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Glunz Jensen  vs.  SKAKO AS

Glunz Jensen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glunz Jensen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

SKAKO AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SKAKO AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Glunz Jensen and SKAKO AS

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

The idea behind Glunz Jensen and SKAKO 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.