Correlation Between SKAKO AS and Glunz Jensen

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

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

Diversification Opportunities for SKAKO AS and Glunz Jensen

0.26

Correlation Coefficient

SKAKO AS  Glunz Jensen

Modest diversification

The 3 months correlation between SKAKO and Glunz is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SKAKO AS and Glunz Jensen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glunz Jensen and SKAKO AS 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 SKAKO AS are associated (or correlated) with Glunz Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glunz Jensen has no effect on the direction of SKAKO AS i.e., SKAKO AS and Glunz Jensen go up and down completely randomly.

Pair Corralation between SKAKO AS and Glunz Jensen

Assuming the 90 days trading horizon SKAKO AS is expected to under-perform the Glunz Jensen. But the stock apears to be less risky and, when comparing its historical volatility, SKAKO AS is 1.5 times less risky than Glunz Jensen. The stock trades about -0.1 of its potential returns per unit of risk. The Glunz Jensen is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  7,450  in Glunz Jensen on December 29, 2024 and sell it today you would lose (650.00) from holding Glunz Jensen or give up 8.72% of portfolio value over 90 days.

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

SKAKO AS  vs.  Glunz Jensen

SKAKO AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SKAKO AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Glunz Jensen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glunz Jensen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with SKAKO AS and Glunz Jensen

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

The idea behind SKAKO AS and Glunz Jensen 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.