diff --git a/packages/editor/src/lib/editor/Editor.ts b/packages/editor/src/lib/editor/Editor.ts
index 39070882c..93e2b9368 100644
--- a/packages/editor/src/lib/editor/Editor.ts
+++ b/packages/editor/src/lib/editor/Editor.ts
@@ -290,8 +290,14 @@ export class Editor extends EventEmitter<TLEventMap> {
 				// if arrow has two bindings, always parent arrow to closest common ancestor of the bindings
 				nextParentId = this.findCommonAncestor([startShape, endShape]) ?? parentPageId
 			} else if (startShape || endShape) {
-				// if arrow has one binding, keep arrow on its own page
-				nextParentId = parentPageId
+				const bindingParentId = (startShape || endShape)?.parentId
+				// If the arrow and the shape that it is bound to have the same parent, then keep that parent
+				if (bindingParentId && bindingParentId === arrow.parentId) {
+					nextParentId = arrow.parentId
+				} else {
+					// if arrow has one binding, keep arrow on its own page
+					nextParentId = parentPageId
+				}
 			} else {
 				return
 			}
diff --git a/packages/tldraw/src/lib/ui/hooks/menuHelpers.ts b/packages/tldraw/src/lib/ui/hooks/menuHelpers.ts
index 50c046749..3ef6b04f0 100644
--- a/packages/tldraw/src/lib/ui/hooks/menuHelpers.ts
+++ b/packages/tldraw/src/lib/ui/hooks/menuHelpers.ts
@@ -1,6 +1,8 @@
 import {
 	Editor,
 	TLArrowShape,
+	TLShape,
+	TLShapeId,
 	assert,
 	exhaustiveSwitchError,
 	useEditor,
@@ -163,10 +165,38 @@ export const useThreeStackableItems = () => {
 	return useValue('threeStackableItems', () => shapesWithUnboundArrows(editor).length > 2, [editor])
 }
 
+function shapesWithArrowsBoundToThem(editor: Editor) {
+	const selectedShapes = editor.getSelectedShapes()
+	const arrows: TLArrowShape[] = []
+	const otherShapesMap = new Map<TLShapeId, TLShape>()
+	selectedShapes.forEach((shape) => {
+		if (shape.type === 'arrow') {
+			arrows.push(shape as TLArrowShape)
+		} else {
+			otherShapesMap.set(shape.id, shape)
+		}
+	})
+	// We want to get all the arrows that are either unbound or bound to one of the selected shapes
+	const groupableArrows = arrows.filter((arrow) => {
+		if (arrow.props.start.type === 'binding') {
+			if (!otherShapesMap.has(arrow.props.start.boundShapeId)) {
+				return false
+			}
+		}
+		if (arrow.props.end.type === 'binding') {
+			if (!otherShapesMap.has(arrow.props.end.boundShapeId)) {
+				return false
+			}
+		}
+		return true
+	})
+	return Array.from(otherShapesMap.values()).concat(groupableArrows)
+}
+
 /** @internal */
 export const useAllowGroup = () => {
 	const editor = useEditor()
-	return useValue('allowGroup', () => shapesWithUnboundArrows(editor).length > 1, [editor])
+	return useValue('allowGroup', () => shapesWithArrowsBoundToThem(editor).length > 1, [editor])
 }
 
 /** @internal */