Correlation Between Storebrand Indeks and Genmab AS
Can any of the company-specific risk be diversified away by investing in both Storebrand Indeks and Genmab AS 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 Storebrand Indeks and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Storebrand Indeks and Genmab AS, you can compare the effects of market volatilities on Storebrand Indeks and Genmab AS 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 Storebrand Indeks with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand Indeks and Genmab AS.
Diversification Opportunities for Storebrand Indeks and Genmab AS
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Storebrand and Genmab is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand Indeks and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Storebrand Indeks 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 Storebrand Indeks are associated (or correlated) with Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of Storebrand Indeks i.e., Storebrand Indeks and Genmab AS go up and down completely randomly.
Pair Corralation between Storebrand Indeks and Genmab AS
Assuming the 90 days trading horizon Storebrand Indeks is expected to generate 0.3 times more return on investment than Genmab AS. However, Storebrand Indeks is 3.29 times less risky than Genmab AS. It trades about 0.14 of its potential returns per unit of risk. Genmab AS is currently generating about -0.06 per unit of risk. If you would invest 143,993 in Storebrand Indeks on January 26, 2024 and sell it today you would earn a total of 32,827 from holding Storebrand Indeks or generate 22.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Storebrand Indeks vs. Genmab AS
Performance |
| Timeline |
| Storebrand Indeks |
| Genmab AS |
Storebrand Indeks and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Storebrand Indeks and Genmab AS
The main advantage of trading using opposite Storebrand Indeks and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storebrand Indeks position performs unexpectedly, Genmab AS 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 Genmab AS will offset losses from the drop in Genmab AS's long position.| Storebrand Indeks vs. Novo Nordisk AS | Storebrand Indeks vs. Nordea Bank Abp | Storebrand Indeks vs. DSV Panalpina AS | Storebrand Indeks vs. AP Mller |
| Genmab AS vs. Ambu AS | Genmab AS vs. DSV Panalpina AS | Genmab AS vs. Bavarian Nordic | Genmab AS vs. GN Store Nord |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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