Correlation Between GN Store and RIAS AS

Can any of the company-specific risk be diversified away by investing in both GN Store and RIAS 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 GN Store and RIAS AS 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 RIAS AS, you can compare the effects of market volatilities on GN Store and RIAS 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 GN Store with a short position of RIAS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GN Store and RIAS AS.

Diversification Opportunities for GN Store and RIAS AS

0.54

Correlation Coefficient

GN Store  RIAS AS

Very weak diversification

The 3 months correlation between GN Store and RIAS is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GN Store Nord and RIAS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RIAS AS 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 RIAS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RIAS AS has no effect on the direction of GN Store i.e., GN Store and RIAS AS go up and down completely randomly.

Pair Corralation between GN Store and RIAS AS

Assuming the 90 days horizon GN Store is expected to generate 1.36 times less return on investment than RIAS AS. In addition to that, GN Store is 1.49 times more volatile than RIAS AS. It trades about 0.03 of its total potential returns per unit of risk. RIAS AS is currently generating about 0.05 per unit of volatility. If you would invest  62,500  in RIAS AS on October 6, 2024 and sell it today you would earn a total of  1,000.00  from holding RIAS AS or generate 1.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

GN Store Nord  vs.  RIAS 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 very healthy fundamental indicators, GN Store is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

RIAS AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RIAS AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, RIAS AS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GN Store and RIAS AS

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

The idea behind GN Store Nord and RIAS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.