Correlation Between Groenlandsbanken and Flgger Group

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

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

Diversification Opportunities for Groenlandsbanken and Flgger Group

-0.25

Correlation Coefficient

Groenlandsbanken  Flgger Group

Very good diversification

The 3 months correlation between Groenlandsbanken and Flgger is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and Flgger group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flgger group AS 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 Flgger Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flgger group AS has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and Flgger Group go up and down completely randomly.

Pair Corralation between Groenlandsbanken and Flgger Group

Assuming the 90 days trading horizon Groenlandsbanken is expected to generate 1.65 times less return on investment than Flgger Group. But when comparing it to its historical volatility, Groenlandsbanken AS is 1.07 times less risky than Flgger Group. It trades about 0.08 of its potential returns per unit of risk. Flgger group AS is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  33,800  in Flgger group AS on October 9, 2024 and sell it today you would earn a total of  800.00  from holding Flgger group AS or generate 2.37% return on investment over 90 days.

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

Groenlandsbanken AS  vs.  Flgger group AS

Groenlandsbanken

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groenlandsbanken AS are ranked lower than 9 (%) 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 February 2025.

Flgger group AS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flgger group AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Flgger Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Groenlandsbanken and Flgger Group

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

The idea behind Groenlandsbanken AS and Flgger 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.