Correlation Between Arctic Fish and Clean Seas
Can any of the company-specific risk be diversified away by investing in both Arctic Fish and Clean Seas 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 Arctic Fish and Clean Seas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Fish Holding and Clean Seas Seafood, you can compare the effects of market volatilities on Arctic Fish and Clean Seas 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 Arctic Fish with a short position of Clean Seas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Fish and Clean Seas.
Diversification Opportunities for Arctic Fish and Clean Seas
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arctic and Clean is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Fish Holding and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood and Arctic Fish 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 Arctic Fish Holding are associated (or correlated) with Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Arctic Fish i.e., Arctic Fish and Clean Seas go up and down completely randomly.
Pair Corralation between Arctic Fish and Clean Seas
Assuming the 90 days trading horizon Arctic Fish is expected to generate 75.75 times less return on investment than Clean Seas. In addition to that, Arctic Fish is 1.41 times more volatile than Clean Seas Seafood. It trades about 0.0 of its total potential returns per unit of risk. Clean Seas Seafood is currently generating about 0.21 per unit of volatility. If you would invest 100.00 in Clean Seas Seafood on December 30, 2024 and sell it today you would earn a total of 10.00 from holding Clean Seas Seafood or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Fish Holding vs. Clean Seas Seafood
Performance |
| Timeline |
| Arctic Fish Holding |
| Clean Seas Seafood |
Arctic Fish and Clean Seas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Fish and Clean Seas
The main advantage of trading using opposite Arctic Fish and Clean Seas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Fish position performs unexpectedly, Clean Seas 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 Clean Seas will offset losses from the drop in Clean Seas' long position.| Arctic Fish vs. Icelandic Salmon As | ||
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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