Correlation Between Avanos Medical and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both Avanos Medical 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 Avanos Medical and Lerøy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and Lery Seafood Group, you can compare the effects of market volatilities on Avanos Medical 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 Avanos Medical with a short position of Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and Lerøy Seafood.
Diversification Opportunities for Avanos Medical and Lerøy Seafood
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avanos and Lerøy is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical 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 Avanos Medical 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 Avanos Medical 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 Avanos Medical i.e., Avanos Medical and Lerøy Seafood go up and down completely randomly.
Pair Corralation between Avanos Medical and Lerøy Seafood
Assuming the 90 days horizon Avanos Medical is expected to under-perform the Lerøy Seafood. In addition to that, Avanos Medical is 1.88 times more volatile than Lery Seafood Group. It trades about -0.08 of its total potential returns per unit of risk. Lery Seafood Group is currently generating about 0.08 per unit of volatility. If you would invest 408.00 in Lery Seafood Group on September 12, 2024 and sell it today you would earn a total of 33.00 from holding Lery Seafood Group or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Avanos Medical vs. Lery Seafood Group
Performance |
| Timeline |
| Avanos Medical |
| Lery Seafood Group |
Avanos Medical and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and Lerøy Seafood
The main advantage of trading using opposite Avanos Medical and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical 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.| Avanos Medical vs. Major Drilling Group | Avanos Medical vs. Kaiser Aluminum | Avanos Medical vs. LION ONE METALS | Avanos Medical vs. SWISS WATER DECAFFCOFFEE |
| Lerøy Seafood vs. Hormel Foods | Lerøy Seafood vs. Superior Plus Corp | Lerøy Seafood vs. SIVERS SEMICONDUCTORS AB | Lerøy Seafood vs. NorAm Drilling AS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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