Correlation Between Grieg Seafood and River
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and River 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 River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and River and Mercantile, you can compare the effects of market volatilities on Grieg Seafood and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and River.
Diversification Opportunities for Grieg Seafood and River
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grieg and River is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and River go up and down completely randomly.
Pair Corralation between Grieg Seafood and River
Assuming the 90 days trading horizon Grieg Seafood is expected to under-perform the River. In addition to that, Grieg Seafood is 1.39 times more volatile than River and Mercantile. It trades about -0.2 of its total potential returns per unit of risk. River and Mercantile is currently generating about 0.05 per unit of volatility. If you would invest 17,650 in River and Mercantile on September 4, 2024 and sell it today you would earn a total of 200.00 from holding River and Mercantile or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grieg Seafood vs. River and Mercantile
Performance |
| Timeline |
| Grieg Seafood |
| River and Mercantile |
Grieg Seafood and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and River
The main advantage of trading using opposite Grieg Seafood and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, River 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 River will offset losses from the drop in River'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 |
| River vs. Taiwan Semiconductor Manufacturing | River vs. Monks Investment Trust | River vs. Smithson Investment Trust | River vs. Impax Environmental Markets |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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