Correlation Between Goodtech and Lery Seafood
Can any of the company-specific risk be diversified away by investing in both Goodtech and Lery 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 Goodtech and Lery Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodtech and Lery Seafood Group, you can compare the effects of market volatilities on Goodtech and Lery 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 Goodtech with a short position of Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodtech and Lery Seafood.
Diversification Opportunities for Goodtech and Lery Seafood
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goodtech and Lery is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Goodtech and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and Goodtech 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 Goodtech are associated (or correlated) with Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Goodtech i.e., Goodtech and Lery Seafood go up and down completely randomly.
Pair Corralation between Goodtech and Lery Seafood
Assuming the 90 days trading horizon Goodtech is expected to generate 1.24 times more return on investment than Lery Seafood. However, Goodtech is 1.24 times more volatile than Lery Seafood Group. It trades about 0.02 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.01 per unit of risk. If you would invest 789.00 in Goodtech on August 28, 2024 and sell it today you would earn a total of 111.00 from holding Goodtech or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodtech vs. Lery Seafood Group
Performance |
| Timeline |
| Goodtech |
| Lery Seafood Group |
Goodtech and Lery Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodtech and Lery Seafood
The main advantage of trading using opposite Goodtech and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodtech position performs unexpectedly, Lery 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA | Goodtech vs. Elkem 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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