Correlation Between American Homes and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both American Homes and Grieg Seafood 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 American Homes and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Homes 4 and Grieg Seafood, you can compare the effects of market volatilities on American Homes and Grieg Seafood 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 American Homes with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and Grieg Seafood.
Diversification Opportunities for American Homes and Grieg Seafood
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Grieg is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and American Homes 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 American Homes 4 are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of American Homes i.e., American Homes and Grieg Seafood go up and down completely randomly.
Pair Corralation between American Homes and Grieg Seafood
Assuming the 90 days trading horizon American Homes 4 is expected to generate 0.48 times more return on investment than Grieg Seafood. However, American Homes 4 is 2.08 times less risky than Grieg Seafood. It trades about 0.0 of its potential returns per unit of risk. Grieg Seafood is currently generating about 0.0 per unit of risk. If you would invest 3,530 in American Homes 4 on October 25, 2024 and sell it today you would lose (31.00) from holding American Homes 4 or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.12% |
| Values | Daily Returns |
American Homes 4 vs. Grieg Seafood
Performance |
| Timeline |
| American Homes 4 |
| Grieg Seafood |
American Homes and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and Grieg Seafood
The main advantage of trading using opposite American Homes and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| American Homes vs. Toyota Motor Corp | American Homes vs. SoftBank Group Corp | American Homes vs. OTP Bank Nyrt | American Homes vs. ONEOK Inc |
| Grieg Seafood vs. Electronic Arts | Grieg Seafood vs. Cairo Communication SpA | Grieg Seafood vs. Liontrust Asset Management | Grieg Seafood vs. Zegona Communications 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |