Correlation Between Grieg Seafood and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and Dow Jones Industrial, you can compare the effects of market volatilities on Grieg Seafood and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Dow Jones.
Diversification Opportunities for Grieg Seafood and Dow Jones
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grieg and Dow is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Dow Jones go up and down completely randomly.
Pair Corralation between Grieg Seafood and Dow Jones
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 4.27 times less return on investment than Dow Jones. In addition to that, Grieg Seafood is 2.72 times more volatile than Dow Jones Industrial. It trades about 0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of volatility. If you would invest 4,329,703 in Dow Jones Industrial on October 25, 2024 and sell it today you would earn a total of 126,804 from holding Dow Jones Industrial or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Grieg Seafood vs. Dow Jones Industrial
Performance |
| Timeline |
Grieg Seafood and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Grieg Seafood
Pair trading matchups for Grieg Seafood
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Grieg Seafood and Dow Jones
The main advantage of trading using opposite Grieg Seafood and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Grieg Seafood vs. Electronic Arts | Grieg Seafood vs. Cairo Communication SpA | Grieg Seafood vs. Liontrust Asset Management | Grieg Seafood vs. Zegona Communications Plc |
| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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