Correlation Between Groenlandsbanken and Aalborg Boldspilklub

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

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

Diversification Opportunities for Groenlandsbanken and Aalborg Boldspilklub

-0.89

Correlation Coefficient

Groenlandsbanken  Aalborg Boldspilklub

Pay attention - limited upside

The 3 months correlation between Groenlandsbanken and Aalborg is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and Aalborg Boldspilklub AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalborg Boldspilklub and Groenlandsbanken 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 Groenlandsbanken AS are associated (or correlated) with Aalborg Boldspilklub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalborg Boldspilklub has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and Aalborg Boldspilklub go up and down completely randomly.

Pair Corralation between Groenlandsbanken and Aalborg Boldspilklub

Assuming the 90 days trading horizon Groenlandsbanken AS is expected to generate 0.43 times more return on investment than Aalborg Boldspilklub. However, Groenlandsbanken AS is 2.35 times less risky than Aalborg Boldspilklub. It trades about 0.11 of its potential returns per unit of risk. Aalborg Boldspilklub AS is currently generating about -0.09 per unit of risk. If you would invest  66,000  in Groenlandsbanken AS on September 13, 2024 and sell it today you would earn a total of  4,500  from holding Groenlandsbanken AS or generate 6.82% return on investment over 90 days.

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

Groenlandsbanken AS  vs.  Aalborg Boldspilklub AS

Groenlandsbanken

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groenlandsbanken AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Groenlandsbanken may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aalborg Boldspilklub

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aalborg Boldspilklub AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers 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.

Pair Trading with Groenlandsbanken and Aalborg Boldspilklub

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

The idea behind Groenlandsbanken AS and Aalborg Boldspilklub 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.