Correlation Between Grieg Seafood and Shell Plc
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Shell 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 Shell 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 Shell plc, you can compare the effects of market volatilities on Grieg Seafood and Shell 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 Shell Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Shell Plc.
Diversification Opportunities for Grieg Seafood and Shell Plc
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grieg and Shell is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and Shell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell 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 Shell Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell plc has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Shell Plc go up and down completely randomly.
Pair Corralation between Grieg Seafood and Shell Plc
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 2.36 times less return on investment than Shell Plc. In addition to that, Grieg Seafood is 2.06 times more volatile than Shell plc. It trades about 0.0 of its total potential returns per unit of risk. Shell plc is currently generating about 0.02 per unit of volatility. If you would invest 252,024 in Shell plc on October 28, 2024 and sell it today you would earn a total of 9,976 from holding Shell plc or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood vs. Shell plc
Performance |
| Timeline |
| Grieg Seafood |
| Shell plc |
Grieg Seafood and Shell Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Shell Plc
The main advantage of trading using opposite Grieg Seafood and Shell Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Shell 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 Shell Plc will offset losses from the drop in Shell Plc's long position.| Grieg Seafood vs. Verizon Communications | Grieg Seafood vs. Porvair plc | Grieg Seafood vs. Zegona Communications Plc | Grieg Seafood vs. Fair Oaks Income |
| Shell Plc vs. Evolution Gaming Group | Shell Plc vs. Heavitree Brewery | Shell Plc vs. Ecofin Global Utilities | Shell Plc vs. Naked Wines plc |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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