Correlation Between Grieg Seafood and Bien Sparebank
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Bien Sparebank 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 Bien Sparebank 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 Bien Sparebank ASA, you can compare the effects of market volatilities on Grieg Seafood and Bien Sparebank 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 Bien Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Bien Sparebank.
Diversification Opportunities for Grieg Seafood and Bien Sparebank
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grieg and Bien is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Bien Sparebank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bien Sparebank 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 Bien Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bien Sparebank ASA has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Bien Sparebank go up and down completely randomly.
Pair Corralation between Grieg Seafood and Bien Sparebank
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 1.18 times less return on investment than Bien Sparebank. In addition to that, Grieg Seafood is 1.59 times more volatile than Bien Sparebank ASA. It trades about 0.14 of its total potential returns per unit of risk. Bien Sparebank ASA is currently generating about 0.26 per unit of volatility. If you would invest 9,300 in Bien Sparebank ASA on September 2, 2024 and sell it today you would earn a total of 3,100 from holding Bien Sparebank ASA or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Bien Sparebank ASA
Performance |
| Timeline |
| Grieg Seafood ASA |
| Bien Sparebank ASA |
Grieg Seafood and Bien Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Bien Sparebank
The main advantage of trading using opposite Grieg Seafood and Bien Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Bien Sparebank 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 Bien Sparebank will offset losses from the drop in Bien Sparebank'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 |
| Bien Sparebank vs. Lea Bank ASA | Bien Sparebank vs. Elkem ASA | Bien Sparebank vs. Integrated Wind Solutions | Bien Sparebank vs. Vow 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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