Correlation Between Gigante Salmon and Veidekke ASA
Can any of the company-specific risk be diversified away by investing in both Gigante Salmon and Veidekke ASA 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 Gigante Salmon and Veidekke ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gigante Salmon AS and Veidekke ASA, you can compare the effects of market volatilities on Gigante Salmon and Veidekke ASA 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 Gigante Salmon with a short position of Veidekke ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigante Salmon and Veidekke ASA.
Diversification Opportunities for Gigante Salmon and Veidekke ASA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gigante and Veidekke is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gigante Salmon AS and Veidekke ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veidekke ASA and Gigante 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 Gigante Salmon AS are associated (or correlated) with Veidekke ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veidekke ASA has no effect on the direction of Gigante Salmon i.e., Gigante Salmon and Veidekke ASA go up and down completely randomly.
Pair Corralation between Gigante Salmon and Veidekke ASA
Assuming the 90 days trading horizon Gigante Salmon is expected to generate 1.27 times less return on investment than Veidekke ASA. In addition to that, Gigante Salmon is 2.35 times more volatile than Veidekke ASA. It trades about 0.04 of its total potential returns per unit of risk. Veidekke ASA is currently generating about 0.13 per unit of volatility. If you would invest 11,400 in Veidekke ASA on September 1, 2024 and sell it today you would earn a total of 2,260 from holding Veidekke ASA or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigante Salmon AS vs. Veidekke ASA
Performance |
| Timeline |
| Gigante Salmon AS |
| Veidekke ASA |
Gigante Salmon and Veidekke ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigante Salmon and Veidekke ASA
The main advantage of trading using opposite Gigante Salmon and Veidekke ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigante Salmon position performs unexpectedly, Veidekke ASA 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 Veidekke ASA will offset losses from the drop in Veidekke ASA's long position.| Gigante Salmon vs. Andfjord Salmon AS | Gigante Salmon vs. Elkem ASA | Gigante Salmon vs. Integrated Wind Solutions | Gigante Salmon vs. Vow ASA |
| Veidekke ASA vs. AF Gruppen ASA | Veidekke ASA vs. Gjensidige Forsikring ASA | Veidekke ASA vs. Storebrand ASA | Veidekke ASA vs. Orkla 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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