Correlation Between Bien Sparebank and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and Grieg Seafood 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 Bien Sparebank and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bien Sparebank ASA and Grieg Seafood ASA, you can compare the effects of market volatilities on Bien Sparebank and Grieg Seafood 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 Bien Sparebank with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and Grieg Seafood.
Diversification Opportunities for Bien Sparebank and Grieg Seafood
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bien and Grieg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and Grieg Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood ASA and Bien Sparebank 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 Bien Sparebank ASA are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood ASA has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and Grieg Seafood go up and down completely randomly.
Pair Corralation between Bien Sparebank and Grieg Seafood
Assuming the 90 days trading horizon Bien Sparebank ASA is expected to generate 0.63 times more return on investment than Grieg Seafood. However, Bien Sparebank ASA is 1.59 times less risky than Grieg Seafood. It trades about 0.26 of its potential returns per unit of risk. Grieg Seafood ASA is currently generating about 0.14 per unit of risk. If you would invest 9,300 in Bien Sparebank ASA on September 2, 2024 and sell it today you would earn a total of 3,100 from holding Bien Sparebank ASA or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bien Sparebank ASA vs. Grieg Seafood ASA
Performance |
| Timeline |
| Bien Sparebank ASA |
| Grieg Seafood ASA |
Bien Sparebank and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bien Sparebank and Grieg Seafood
The main advantage of trading using opposite Bien Sparebank and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Bien Sparebank vs. Lea Bank ASA | Bien Sparebank vs. Elkem ASA | Bien Sparebank vs. Integrated Wind Solutions | Bien Sparebank vs. Vow ASA |
| Grieg Seafood vs. Lery Seafood Group | Grieg Seafood vs. SalMar ASA | Grieg Seafood vs. Austevoll Seafood ASA | Grieg Seafood vs. Mowi 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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