Correlation Between Grieg Seafood and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Compagnie Plastic 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 Grieg Seafood and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Grieg Seafood and Compagnie Plastic 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 Grieg Seafood with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Compagnie Plastic.
Diversification Opportunities for Grieg Seafood and Compagnie Plastic
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grieg and Compagnie is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and Grieg Seafood 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 Grieg Seafood are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Grieg Seafood and Compagnie Plastic
Assuming the 90 days trading horizon Grieg Seafood is expected to under-perform the Compagnie Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Grieg Seafood is 1.03 times less risky than Compagnie Plastic. The stock trades about -0.13 of its potential returns per unit of risk. The Compagnie Plastic Omnium is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 902.00 in Compagnie Plastic Omnium on September 3, 2024 and sell it today you would lose (37.00) from holding Compagnie Plastic Omnium or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Grieg Seafood |
| Compagnie Plastic Omnium |
Grieg Seafood and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Compagnie Plastic
The main advantage of trading using opposite Grieg Seafood and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Grieg Seafood vs. Melia Hotels | Grieg Seafood vs. Capital Metals PLC | Grieg Seafood vs. Golden Metal Resources | Grieg Seafood vs. PPHE Hotel Group |
| Compagnie Plastic vs. Catalyst Media Group | Compagnie Plastic vs. CATLIN GROUP | Compagnie Plastic vs. Magnora ASA | Compagnie Plastic vs. RTW Venture Fund |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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