Correlation Between GN Store and Dataproces Group

Can any of the company-specific risk be diversified away by investing in both GN Store and Dataproces Group 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 GN Store and Dataproces Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GN Store Nord and Dataproces Group AS, you can compare the effects of market volatilities on GN Store and Dataproces Group 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 GN Store with a short position of Dataproces Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GN Store and Dataproces Group.

Diversification Opportunities for GN Store and Dataproces Group

-0.81

Correlation Coefficient

GN Store  Dataproces Group

Pay attention - limited upside

The 3 months correlation between GN Store and Dataproces is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding GN Store Nord and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group and GN Store 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 GN Store Nord are associated (or correlated) with Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of GN Store i.e., GN Store and Dataproces Group go up and down completely randomly.

Pair Corralation between GN Store and Dataproces Group

Assuming the 90 days horizon GN Store Nord is expected to under-perform the Dataproces Group. But the stock apears to be less risky and, when comparing its historical volatility, GN Store Nord is 1.24 times less risky than Dataproces Group. The stock trades about -0.11 of its potential returns per unit of risk. The Dataproces Group AS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  510.00  in Dataproces Group AS on September 13, 2024 and sell it today you would earn a total of  90.00  from holding Dataproces Group AS or generate 17.65% return on investment over 90 days.

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

GN Store Nord  vs.  Dataproces Group AS

GN Store Nord

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GN Store Nord 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 fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dataproces Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GN Store and Dataproces Group

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

The idea behind GN Store Nord and Dataproces Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.