Correlation Between Archer Daniels and MOWI ASA
Can any of the company-specific risk be diversified away by investing in both Archer Daniels and MOWI ASA 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 Archer Daniels and MOWI ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archer Daniels Midland and MOWI ASA SPADR, you can compare the effects of market volatilities on Archer Daniels and MOWI ASA 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 Archer Daniels with a short position of MOWI ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archer Daniels and MOWI ASA.
Diversification Opportunities for Archer Daniels and MOWI ASA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Archer and MOWI is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Archer Daniels Midland and MOWI ASA SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOWI ASA SPADR and Archer Daniels 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 Archer Daniels Midland are associated (or correlated) with MOWI ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOWI ASA SPADR has no effect on the direction of Archer Daniels i.e., Archer Daniels and MOWI ASA go up and down completely randomly.
Pair Corralation between Archer Daniels and MOWI ASA
Assuming the 90 days horizon Archer Daniels Midland is expected to under-perform the MOWI ASA. In addition to that, Archer Daniels is 1.22 times more volatile than MOWI ASA SPADR. It trades about -0.02 of its total potential returns per unit of risk. MOWI ASA SPADR is currently generating about 0.03 per unit of volatility. If you would invest 1,472 in MOWI ASA SPADR on August 31, 2024 and sell it today you would earn a total of 228.00 from holding MOWI ASA SPADR or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archer Daniels Midland vs. MOWI ASA SPADR
Performance |
| Timeline |
| Archer Daniels Midland |
| MOWI ASA SPADR |
Archer Daniels and MOWI ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archer Daniels and MOWI ASA
The main advantage of trading using opposite Archer Daniels and MOWI ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Daniels position performs unexpectedly, MOWI ASA 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 MOWI ASA will offset losses from the drop in MOWI ASA's long position.| Archer Daniels vs. SalMar ASA | Archer Daniels vs. Superior Plus Corp | Archer Daniels vs. NMI Holdings | Archer Daniels vs. Origin Agritech |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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