Correlation Between Grieg Seafood and AB SKF
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and AB SKF 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 AB SKF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and AB SKF B, you can compare the effects of market volatilities on Grieg Seafood and AB SKF 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 AB SKF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and AB SKF.
Diversification Opportunities for Grieg Seafood and AB SKF
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grieg and 0NWX is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and AB SKF B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB SKF B 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 AB SKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB SKF B has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and AB SKF go up and down completely randomly.
Pair Corralation between Grieg Seafood and AB SKF
Assuming the 90 days trading horizon Grieg Seafood is expected to under-perform the AB SKF. But the stock apears to be less risky and, when comparing its historical volatility, Grieg Seafood is 1.17 times less risky than AB SKF. The stock trades about -0.2 of its potential returns per unit of risk. The AB SKF B is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 20,380 in AB SKF B on September 4, 2024 and sell it today you would earn a total of 1,010 from holding AB SKF B or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood vs. AB SKF B
Performance |
| Timeline |
| Grieg Seafood |
| AB SKF B |
Grieg Seafood and AB SKF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and AB SKF
The main advantage of trading using opposite Grieg Seafood and AB SKF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, AB SKF 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 AB SKF will offset losses from the drop in AB SKF's long position.| Grieg Seafood vs. Samsung Electronics Co | Grieg Seafood vs. Samsung Electronics Co | Grieg Seafood vs. Hyundai Motor | Grieg Seafood vs. Toyota Motor Corp |
| AB SKF vs. Grieg Seafood | AB SKF vs. Auction Technology Group | AB SKF vs. Allianz Technology Trust | AB SKF vs. Hilton Food Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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