Correlation Between Scandinavian Brake and Groenlandsbanken

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

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

Diversification Opportunities for Scandinavian Brake and Groenlandsbanken

0.0

Correlation Coefficient

Scandinavian Brake  Groenlandsbanken

Pay attention - limited upside

The 3 months correlation between Scandinavian and Groenlandsbanken is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Brake Systems and Groenlandsbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groenlandsbanken and Scandinavian Brake 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 Scandinavian Brake Systems are associated (or correlated) with Groenlandsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groenlandsbanken has no effect on the direction of Scandinavian Brake i.e., Scandinavian Brake and Groenlandsbanken go up and down completely randomly.

Pair Corralation between Scandinavian Brake and Groenlandsbanken

If you would invest  70,000  in Groenlandsbanken AS on December 30, 2024 and sell it today you would earn a total of  7,000  from holding Groenlandsbanken AS or generate 10.0% return on investment over 90 days.

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

Scandinavian Brake Systems  vs.  Groenlandsbanken AS

Scandinavian Brake

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scandinavian Brake Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Scandinavian Brake is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Groenlandsbanken

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Groenlandsbanken AS are ranked lower than 5 (%) 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 April 2025.

Pair Trading with Scandinavian Brake and Groenlandsbanken

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

The idea behind Scandinavian Brake Systems and Groenlandsbanken 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.