Correlation Between Grieg Seafood and Bergenbio ASA
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Bergenbio 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 Grieg Seafood and Bergenbio ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood ASA and Bergenbio ASA, you can compare the effects of market volatilities on Grieg Seafood and Bergenbio 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 Grieg Seafood with a short position of Bergenbio ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Bergenbio ASA.
Diversification Opportunities for Grieg Seafood and Bergenbio ASA
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grieg and Bergenbio is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Bergenbio ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergenbio ASA and Grieg Seafood 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 Grieg Seafood ASA are associated (or correlated) with Bergenbio ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergenbio ASA has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Bergenbio ASA go up and down completely randomly.
Pair Corralation between Grieg Seafood and Bergenbio ASA
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 7.68 times less return on investment than Bergenbio ASA. But when comparing it to its historical volatility, Grieg Seafood ASA is 5.89 times less risky than Bergenbio ASA. It trades about 0.01 of its potential returns per unit of risk. Bergenbio ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 59,918 in Bergenbio ASA on September 2, 2024 and sell it today you would lose (58,831) from holding Bergenbio ASA or give up 98.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Bergenbio ASA
Performance |
| Timeline |
| Grieg Seafood ASA |
| Bergenbio ASA |
Grieg Seafood and Bergenbio ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Bergenbio ASA
The main advantage of trading using opposite Grieg Seafood and Bergenbio ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Bergenbio 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 Bergenbio ASA will offset losses from the drop in Bergenbio ASA's long position.| Grieg Seafood vs. Lery Seafood Group | Grieg Seafood vs. SalMar ASA | Grieg Seafood vs. Austevoll Seafood ASA | Grieg Seafood vs. Mowi ASA |
| Bergenbio ASA vs. DnB ASA | Bergenbio ASA vs. Sparebank 1 SMN | Bergenbio ASA vs. Norsk Hydro ASA | Bergenbio ASA vs. Equinor 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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