Correlation Between Grupo Financiero and Danske Bank

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

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

Diversification Opportunities for Grupo Financiero and Danske Bank

0.43

Correlation Coefficient

Grupo Financiero  Danske Bank

Very weak diversification

The 3 months correlation between Grupo and Danske is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Banorte and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS and Grupo Financiero 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 Grupo Financiero Banorte are associated (or correlated) with Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Danske Bank go up and down completely randomly.

Pair Corralation between Grupo Financiero and Danske Bank

Assuming the 90 days horizon Grupo Financiero is expected to generate 11.13 times less return on investment than Danske Bank. In addition to that, Grupo Financiero is 1.39 times more volatile than Danske Bank AS. It trades about 0.01 of its total potential returns per unit of risk. Danske Bank AS is currently generating about 0.11 per unit of volatility. If you would invest  1,854  in Danske Bank AS on May 7, 2025 and sell it today you would earn a total of  168.00  from holding Danske Bank AS or generate 9.06% return on investment over 90 days.

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

Grupo Financiero Banorte  vs.  Danske Bank AS

Grupo Financiero Banorte

Risk-Adjusted Performance

Weakest

Over the last 90 days Grupo Financiero Banorte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Grupo Financiero is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Danske Bank AS

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Danske Bank AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Danske Bank may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Grupo Financiero and Danske Bank

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

The idea behind Grupo Financiero Banorte and Danske Bank 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.