Correlation Between Grieg Seafood and Mowi ASA
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Mowi 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 Mowi 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 Mowi ASA, you can compare the effects of market volatilities on Grieg Seafood and Mowi 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 Mowi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Mowi ASA.
Diversification Opportunities for Grieg Seafood and Mowi ASA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grieg and Mowi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Mowi ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mowi 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 Mowi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mowi ASA has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Mowi ASA go up and down completely randomly.
Pair Corralation between Grieg Seafood and Mowi ASA
Assuming the 90 days trading horizon Grieg Seafood ASA is expected to under-perform the Mowi ASA. In addition to that, Grieg Seafood is 1.86 times more volatile than Mowi ASA. It trades about -0.27 of its total potential returns per unit of risk. Mowi ASA is currently generating about 0.04 per unit of volatility. If you would invest 19,761 in Mowi ASA on August 29, 2024 and sell it today you would earn a total of 239.00 from holding Mowi ASA or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Mowi ASA
Performance |
| Timeline |
| Grieg Seafood ASA |
| Mowi ASA |
Grieg Seafood and Mowi ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Mowi ASA
The main advantage of trading using opposite Grieg Seafood and Mowi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Mowi 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 Mowi ASA will offset losses from the drop in Mowi 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 |
| Mowi ASA vs. Andfjord Salmon AS | Mowi ASA vs. Elkem ASA | Mowi ASA vs. Vow ASA | Mowi ASA vs. North Energy 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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