Correlation Between INTER CARS and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Lerøy 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 INTER CARS and Lerøy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and Lery Seafood Group, you can compare the effects of market volatilities on INTER CARS and Lerøy 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 INTER CARS with a short position of Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Lerøy Seafood.
Diversification Opportunities for INTER CARS and Lerøy Seafood
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INTER and Lerøy is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and INTER CARS 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 INTER CARS SA are associated (or correlated) with Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of INTER CARS i.e., INTER CARS and Lerøy Seafood go up and down completely randomly.
Pair Corralation between INTER CARS and Lerøy Seafood
Assuming the 90 days horizon INTER CARS is expected to generate 1.2 times less return on investment than Lerøy Seafood. In addition to that, INTER CARS is 1.25 times more volatile than Lery Seafood Group. It trades about 0.26 of its total potential returns per unit of risk. Lery Seafood Group is currently generating about 0.38 per unit of volatility. If you would invest 421.00 in Lery Seafood Group on November 3, 2024 and sell it today you would earn a total of 56.00 from holding Lery Seafood Group or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. Lery Seafood Group
Performance |
| Timeline |
| INTER CARS SA |
| Lery Seafood Group |
INTER CARS and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Lerøy Seafood
The main advantage of trading using opposite INTER CARS and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Lerøy 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 Lerøy Seafood will offset losses from the drop in Lerøy Seafood's long position.| INTER CARS vs. GRIFFIN MINING LTD | INTER CARS vs. Zijin Mining Group | INTER CARS vs. Western Copper and | INTER CARS vs. TRI CHEMICAL LABORATINC |
| Lerøy Seafood vs. Mowi ASA | Lerøy Seafood vs. LEROY SEAFOOD GRUNSPADR | Lerøy Seafood vs. Yihai International Holding | Lerøy Seafood vs. Lery Seafood Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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