Correlation Between Grong Sparebank and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Grong 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 Grong 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 Grong Sparebank and Grieg Seafood ASA, you can compare the effects of market volatilities on Grong 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 Grong Sparebank with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Grieg Seafood.
Diversification Opportunities for Grong Sparebank and Grieg Seafood
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grong and Grieg is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank 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 Grong 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 Grong Sparebank 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 Grong Sparebank i.e., Grong Sparebank and Grieg Seafood go up and down completely randomly.
Pair Corralation between Grong Sparebank and Grieg Seafood
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 0.48 times more return on investment than Grieg Seafood. However, Grong Sparebank is 2.1 times less risky than Grieg Seafood. It trades about 0.08 of its potential returns per unit of risk. Grieg Seafood ASA is currently generating about -0.05 per unit of risk. If you would invest 15,000 in Grong Sparebank on October 25, 2024 and sell it today you would earn a total of 188.00 from holding Grong Sparebank or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Grong Sparebank vs. Grieg Seafood ASA
Performance |
| Timeline |
| Grong Sparebank |
| Grieg Seafood ASA |
Grong Sparebank and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Grieg Seafood
The main advantage of trading using opposite Grong Sparebank and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong 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.| Grong Sparebank vs. Sparebanken Ost | Grong Sparebank vs. Aurskog Sparebank | Grong Sparebank vs. Romerike Sparebank | Grong Sparebank vs. Dolphin Drilling AS |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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