Correlation Between Grieg Seafood and Icelandic Salmon
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Icelandic Salmon 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 Icelandic Salmon 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 Icelandic Salmon As, you can compare the effects of market volatilities on Grieg Seafood and Icelandic Salmon 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 Icelandic Salmon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Icelandic Salmon.
Diversification Opportunities for Grieg Seafood and Icelandic Salmon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grieg and Icelandic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Icelandic Salmon As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icelandic Salmon 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 Icelandic Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icelandic Salmon has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Icelandic Salmon go up and down completely randomly.
Pair Corralation between Grieg Seafood and Icelandic Salmon
Assuming the 90 days trading horizon Grieg Seafood ASA is expected to under-perform the Icelandic Salmon. In addition to that, Grieg Seafood is 1.51 times more volatile than Icelandic Salmon As. It trades about -0.13 of its total potential returns per unit of risk. Icelandic Salmon As is currently generating about -0.03 per unit of volatility. If you would invest 12,200 in Icelandic Salmon As on September 1, 2024 and sell it today you would lose (200.00) from holding Icelandic Salmon As or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Icelandic Salmon As
Performance |
| Timeline |
| Grieg Seafood ASA |
| Icelandic Salmon |
Grieg Seafood and Icelandic Salmon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Icelandic Salmon
The main advantage of trading using opposite Grieg Seafood and Icelandic Salmon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Icelandic Salmon 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 Icelandic Salmon will offset losses from the drop in Icelandic Salmon'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 |
| Icelandic Salmon vs. Ice Fish Farm | Icelandic Salmon vs. Arctic Fish Holding | Icelandic Salmon vs. Salmon Evolution Holding | Icelandic Salmon vs. Grieg Seafood 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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