Correlation Between Andfjord Salmon and North Energy
Can any of the company-specific risk be diversified away by investing in both Andfjord Salmon and North Energy 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 North Energy 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 North Energy ASA, you can compare the effects of market volatilities on Andfjord Salmon and North Energy 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 North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andfjord Salmon and North Energy.
Diversification Opportunities for Andfjord Salmon and North Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Andfjord and North is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Andfjord Salmon AS and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy ASA 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 North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Andfjord Salmon i.e., Andfjord Salmon and North Energy go up and down completely randomly.
Pair Corralation between Andfjord Salmon and North Energy
Assuming the 90 days trading horizon Andfjord Salmon AS is expected to generate 1.48 times more return on investment than North Energy. However, Andfjord Salmon is 1.48 times more volatile than North Energy ASA. It trades about 0.29 of its potential returns per unit of risk. North Energy ASA is currently generating about 0.13 per unit of risk. If you would invest 3,030 in Andfjord Salmon AS on August 29, 2024 and sell it today you would earn a total of 950.00 from holding Andfjord Salmon AS or generate 31.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Andfjord Salmon AS vs. North Energy ASA
Performance |
| Timeline |
| Andfjord Salmon AS |
| North Energy ASA |
Andfjord Salmon and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andfjord Salmon and North Energy
The main advantage of trading using opposite Andfjord Salmon and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andfjord Salmon position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy's long position.| Andfjord Salmon vs. Salmon Evolution Holding | Andfjord Salmon vs. Atlantic Sapphire As | Andfjord Salmon vs. Nordic Aqua Partners | Andfjord Salmon vs. Grieg Seafood ASA |
| North Energy vs. Bien Sparebank ASA | North Energy vs. Aurskog Sparebank | North Energy vs. Proximar Seafood AS | North Energy vs. Grong Sparebank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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