Correlation Between Bell Food and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Bell Food 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 Bell Food and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Food Group and Grieg Seafood, you can compare the effects of market volatilities on Bell Food 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 Bell Food with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and Grieg Seafood.
Diversification Opportunities for Bell Food and Grieg Seafood
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bell and Grieg is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Bell Food 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 Bell Food Group 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 Bell Food i.e., Bell Food and Grieg Seafood go up and down completely randomly.
Pair Corralation between Bell Food and Grieg Seafood
Assuming the 90 days trading horizon Bell Food Group is expected to generate 0.12 times more return on investment than Grieg Seafood. However, Bell Food Group is 8.0 times less risky than Grieg Seafood. It trades about 0.05 of its potential returns per unit of risk. Grieg Seafood is currently generating about -0.23 per unit of risk. If you would invest 26,500 in Bell Food Group on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Bell Food Group or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bell Food Group vs. Grieg Seafood
Performance |
| Timeline |
| Bell Food Group |
| Grieg Seafood |
Bell Food and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and Grieg Seafood
The main advantage of trading using opposite Bell Food and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food 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.| Bell Food vs. Lendinvest PLC | Bell Food vs. Neometals | Bell Food vs. Coor Service Management | Bell Food vs. Albion Technology General |
| Grieg Seafood vs. Lendinvest PLC | Grieg Seafood vs. Neometals | Grieg Seafood vs. Coor Service Management | Grieg Seafood vs. Albion Technology General |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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