Correlation Between Grieg Seafood and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Hammerson PLC 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 Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and Hammerson PLC, you can compare the effects of market volatilities on Grieg Seafood and Hammerson PLC 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 Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Hammerson PLC.
Diversification Opportunities for Grieg Seafood and Hammerson PLC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grieg and Hammerson is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC 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 Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Hammerson PLC go up and down completely randomly.
Pair Corralation between Grieg Seafood and Hammerson PLC
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 55.41 times less return on investment than Hammerson PLC. But when comparing it to its historical volatility, Grieg Seafood is 18.77 times less risky than Hammerson PLC. It trades about 0.01 of its potential returns per unit of risk. Hammerson PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 30,400 in Hammerson PLC on November 19, 2024 and sell it today you would lose (1,120) from holding Hammerson PLC or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Grieg Seafood vs. Hammerson PLC
Performance |
| Timeline |
| Grieg Seafood |
| Hammerson PLC |
Grieg Seafood and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Hammerson PLC
The main advantage of trading using opposite Grieg Seafood and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Hammerson PLC 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 Hammerson PLC will offset losses from the drop in Hammerson PLC's long position.| Grieg Seafood vs. Cairo Communication SpA | Grieg Seafood vs. Infrastrutture Wireless Italiane | Grieg Seafood vs. G5 Entertainment AB | Grieg Seafood vs. Dairy Farm International |
| Hammerson PLC vs. InterContinental Hotels Group | Hammerson PLC vs. SBM Offshore NV | Hammerson PLC vs. Cornish Metals | Hammerson PLC vs. Europa Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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