Correlation Between Volkswagen and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Volkswagen 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 Volkswagen and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG Non Vtg and Grieg Seafood, you can compare the effects of market volatilities on Volkswagen 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 Volkswagen with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Grieg Seafood.
Diversification Opportunities for Volkswagen and Grieg Seafood
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Volkswagen and Grieg is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Non Vtg and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Volkswagen 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 Volkswagen AG Non Vtg 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 Volkswagen i.e., Volkswagen and Grieg Seafood go up and down completely randomly.
Pair Corralation between Volkswagen and Grieg Seafood
Assuming the 90 days trading horizon Volkswagen AG Non Vtg is expected to under-perform the Grieg Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Volkswagen AG Non Vtg is 1.39 times less risky than Grieg Seafood. The stock trades about -0.01 of its potential returns per unit of risk. The Grieg Seafood is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 7,676 in Grieg Seafood on October 13, 2024 and sell it today you would lose (1,451) from holding Grieg Seafood or give up 18.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG Non Vtg vs. Grieg Seafood
Performance |
| Timeline |
| Volkswagen AG Non |
| Grieg Seafood |
Volkswagen and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Grieg Seafood
The main advantage of trading using opposite Volkswagen and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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.| Volkswagen vs. Beowulf Mining | Volkswagen vs. UNIQA Insurance Group | Volkswagen vs. Anglo Asian Mining | Volkswagen vs. Vienna Insurance Group |
| Grieg Seafood vs. Walmart | Grieg Seafood vs. BYD Co | Grieg Seafood vs. Volkswagen AG | Grieg Seafood vs. Volkswagen AG Non Vtg |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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