Correlation Between GN Store and GN Store

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

Diversification Opportunities for GN Store and GN Store

0.9

Correlation Coefficient

GN Store  GN Store

Almost no diversification

The 3 months correlation between GNNDY and GGNDF is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding GN Store Nord 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 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 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 GN Store i.e., GN Store and GN Store go up and down completely randomly.

Pair Corralation between GN Store and GN Store

Assuming the 90 days horizon GN Store Nord is expected to generate 0.64 times more return on investment than GN Store. However, GN Store Nord is 1.57 times less risky than GN Store. It trades about -0.2 of its potential returns per unit of risk. GN Store Nord is currently generating about -0.18 per unit of risk. If you would invest  7,245  in GN Store Nord on September 4, 2024 and sell it today you would lose (1,453) from holding GN Store Nord or give up 20.06% of portfolio value over 90 days.

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

GN Store Nord  vs.  GN Store Nord

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 fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GN Store and GN Store

The main advantage of trading using opposite GN Store and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GN Store 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.

The idea behind GN Store Nord and GN Store Nord 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.