Correlation Between Groenlandsbanken and Intel
Can any of the company-specific risk be diversified away by investing in both Groenlandsbanken and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groenlandsbanken AS and Intel, you can compare the effects of market volatilities on Groenlandsbanken and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groenlandsbanken and Intel.
Diversification Opportunities for Groenlandsbanken and Intel
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groenlandsbanken and Intel is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Groenlandsbanken AS and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Groenlandsbanken i.e., Groenlandsbanken and Intel go up and down completely randomly.
Pair Corralation between Groenlandsbanken and Intel
Assuming the 90 days trading horizon Groenlandsbanken AS is expected to generate 0.25 times more return on investment than Intel. However, Groenlandsbanken AS is 4.03 times less risky than Intel. It trades about -0.19 of its potential returns per unit of risk. Intel is currently generating about -0.35 per unit of risk. If you would invest 65,500 in Groenlandsbanken AS on January 25, 2024 and sell it today you would lose (1,500) from holding Groenlandsbanken AS or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Groenlandsbanken AS vs. Intel
Performance |
| Timeline |
| Groenlandsbanken |
| Intel |
Groenlandsbanken and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groenlandsbanken and Intel
The main advantage of trading using opposite Groenlandsbanken and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groenlandsbanken position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Groenlandsbanken vs. Bavarian Nordic | Groenlandsbanken vs. DSV Panalpina AS | Groenlandsbanken vs. Vestas Wind Systems | Groenlandsbanken vs. Ambu AS |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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