Correlation Between Clean Seas and Beerenberg
Can any of the company-specific risk be diversified away by investing in both Clean Seas and Beerenberg 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 Clean Seas and Beerenberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Seas Seafood and Beerenberg AS, you can compare the effects of market volatilities on Clean Seas and Beerenberg 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 Clean Seas with a short position of Beerenberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Beerenberg.
Diversification Opportunities for Clean Seas and Beerenberg
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clean and Beerenberg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Beerenberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beerenberg AS and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with Beerenberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beerenberg AS has no effect on the direction of Clean Seas i.e., Clean Seas and Beerenberg go up and down completely randomly.
Pair Corralation between Clean Seas and Beerenberg
Assuming the 90 days trading horizon Clean Seas Seafood is expected to under-perform the Beerenberg. In addition to that, Clean Seas is 1.64 times more volatile than Beerenberg AS. It trades about -0.17 of its total potential returns per unit of risk. Beerenberg AS is currently generating about 0.14 per unit of volatility. If you would invest 2,800 in Beerenberg AS on September 1, 2024 and sell it today you would earn a total of 1,300 from holding Beerenberg AS or generate 46.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Seas Seafood vs. Beerenberg AS
Performance |
| Timeline |
| Clean Seas Seafood |
| Beerenberg AS |
Clean Seas and Beerenberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Seas and Beerenberg
The main advantage of trading using opposite Clean Seas and Beerenberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Seas position performs unexpectedly, Beerenberg 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 Beerenberg will offset losses from the drop in Beerenberg's long position.| Clean Seas vs. Masoval AS | Clean Seas vs. Andfjord Salmon AS | Clean Seas vs. Arctic Fish Holding | Clean Seas vs. Ice Fish Farm |
| Beerenberg vs. Sparebanken Ost | Beerenberg vs. Skue Sparebank | Beerenberg vs. Polaris Media | Beerenberg vs. Clean Seas Seafood |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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