Correlation Between Entra ASA and Ice Fish
Can any of the company-specific risk be diversified away by investing in both Entra ASA and Ice 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 Entra ASA and Ice Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entra ASA and Ice Fish Farm, you can compare the effects of market volatilities on Entra ASA and Ice 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 Entra ASA with a short position of Ice Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entra ASA and Ice Fish.
Diversification Opportunities for Entra ASA and Ice Fish
Excellent diversification
The 3 months correlation between Entra and Ice is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Entra ASA and Ice Fish Farm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ice Fish Farm and Entra ASA 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 Entra ASA are associated (or correlated) with Ice Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ice Fish Farm has no effect on the direction of Entra ASA i.e., Entra ASA and Ice Fish go up and down completely randomly.
Pair Corralation between Entra ASA and Ice Fish
Assuming the 90 days trading horizon Entra ASA is expected to generate 2.55 times less return on investment than Ice Fish. But when comparing it to its historical volatility, Entra ASA is 2.59 times less risky than Ice Fish. It trades about 0.11 of its potential returns per unit of risk. Ice Fish Farm is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Ice Fish Farm on September 1, 2024 and sell it today you would earn a total of 240.00 from holding Ice Fish Farm or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Entra ASA vs. Ice Fish Farm
Performance |
| Timeline |
| Entra ASA |
| Ice Fish Farm |
Entra ASA and Ice Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entra ASA and Ice Fish
The main advantage of trading using opposite Entra ASA and Ice Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entra ASA position performs unexpectedly, Ice 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 Ice Fish will offset losses from the drop in Ice Fish's long position.| Entra ASA vs. Gjensidige Forsikring ASA | Entra ASA vs. Storebrand ASA | Entra ASA vs. Olav Thon Eien | Entra ASA vs. DnB ASA |
| Ice Fish vs. Icelandic Salmon As | Ice Fish vs. Arctic Fish Holding | Ice Fish vs. Salmon Evolution Holding | Ice Fish 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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