Correlation Between Andfjord Salmon and Arctic Fish
Can any of the company-specific risk be diversified away by investing in both Andfjord Salmon and Arctic Fish 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 Andfjord Salmon and Arctic Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andfjord Salmon AS and Arctic Fish Holding, you can compare the effects of market volatilities on Andfjord Salmon and Arctic Fish 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 Andfjord Salmon with a short position of Arctic Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andfjord Salmon and Arctic Fish.
Diversification Opportunities for Andfjord Salmon and Arctic Fish
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Andfjord and Arctic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Andfjord Salmon AS and Arctic Fish Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Fish Holding and Andfjord Salmon 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 Andfjord Salmon AS are associated (or correlated) with Arctic Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Fish Holding has no effect on the direction of Andfjord Salmon i.e., Andfjord Salmon and Arctic Fish go up and down completely randomly.
Pair Corralation between Andfjord Salmon and Arctic Fish
Assuming the 90 days trading horizon Andfjord Salmon AS is expected to generate 0.57 times more return on investment than Arctic Fish. However, Andfjord Salmon AS is 1.77 times less risky than Arctic Fish. It trades about 0.33 of its potential returns per unit of risk. Arctic Fish Holding is currently generating about 0.08 per unit of risk. If you would invest 3,290 in Andfjord Salmon AS on August 25, 2024 and sell it today you would earn a total of 710.00 from holding Andfjord Salmon AS or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andfjord Salmon AS vs. Arctic Fish Holding
Performance |
| Timeline |
| Andfjord Salmon AS |
| Arctic Fish Holding |
Andfjord Salmon and Arctic Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andfjord Salmon and Arctic Fish
The main advantage of trading using opposite Andfjord Salmon and Arctic Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andfjord Salmon position performs unexpectedly, Arctic Fish 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 Arctic Fish will offset losses from the drop in Arctic Fish's long position.| Andfjord Salmon vs. Arctic Fish Holding | Andfjord Salmon vs. Ice Fish Farm | Andfjord Salmon vs. Elkem ASA | Andfjord Salmon vs. Vow ASA |
| Arctic Fish vs. Andfjord Salmon AS | Arctic Fish vs. Ice Fish Farm | Arctic Fish vs. Elkem ASA | Arctic Fish vs. Vow 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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