Correlation Between Orderyoyo and Groenlandsbanken

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

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

Diversification Opportunities for Orderyoyo and Groenlandsbanken

-0.35

Correlation Coefficient

Orderyoyo  Groenlandsbanken

Very good diversification

The 3 months correlation between Orderyoyo and Groenlandsbanken is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Orderyoyo AS and Groenlandsbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groenlandsbanken and Orderyoyo 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 Orderyoyo AS 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 Orderyoyo i.e., Orderyoyo and Groenlandsbanken go up and down completely randomly.

Pair Corralation between Orderyoyo and Groenlandsbanken

Assuming the 90 days trading horizon Orderyoyo is expected to generate 2.78 times less return on investment than Groenlandsbanken. In addition to that, Orderyoyo is 2.89 times more volatile than Groenlandsbanken AS. It trades about 0.01 of its total potential returns per unit of risk. Groenlandsbanken AS is currently generating about 0.11 per unit of volatility. If you would invest  66,000  in Groenlandsbanken AS on September 13, 2024 and sell it today you would earn a total of  4,500  from holding Groenlandsbanken AS or generate 6.82% return on investment over 90 days.

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

Orderyoyo AS  vs.  Groenlandsbanken AS

Orderyoyo AS

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orderyoyo AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Orderyoyo is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Groenlandsbanken

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groenlandsbanken AS are ranked lower than 8 (%) 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 January 2025.

Pair Trading with Orderyoyo and Groenlandsbanken

The main advantage of trading using opposite Orderyoyo and Groenlandsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orderyoyo 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 Orderyoyo AS 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.