Correlation Between Arctic Fish and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Arctic Fish and SalMar 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 Arctic Fish and SalMar ASA 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 SalMar ASA, you can compare the effects of market volatilities on Arctic Fish and SalMar 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 Arctic Fish with a short position of SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Fish and SalMar ASA.
Diversification Opportunities for Arctic Fish and SalMar ASA
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arctic and SalMar is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Fish Holding and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Arctic Fish i.e., Arctic Fish and SalMar ASA go up and down completely randomly.
Pair Corralation between Arctic Fish and SalMar ASA
Assuming the 90 days trading horizon Arctic Fish is expected to generate 2.98 times less return on investment than SalMar ASA. In addition to that, Arctic Fish is 2.37 times more volatile than SalMar ASA. It trades about 0.01 of its total potential returns per unit of risk. SalMar ASA is currently generating about 0.06 per unit of volatility. If you would invest 42,676 in SalMar ASA on September 12, 2024 and sell it today you would earn a total of 14,824 from holding SalMar ASA or generate 34.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Fish Holding vs. SalMar ASA
Performance |
| Timeline |
| Arctic Fish Holding |
| SalMar ASA |
Arctic Fish and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Fish and SalMar ASA
The main advantage of trading using opposite Arctic Fish and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Fish position performs unexpectedly, SalMar 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Arctic Fish vs. SalMar ASA | Arctic Fish vs. Lery Seafood Group | Arctic Fish vs. Pf Bakkafrost | Arctic Fish vs. Grieg Seafood ASA |
| SalMar ASA vs. Mowi ASA | SalMar ASA vs. Lery Seafood Group | SalMar ASA vs. Pf Bakkafrost | SalMar ASA vs. Grieg Seafood ASA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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