Correlation Between Grieg Seafood and Nordic Aqua
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Nordic Aqua 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 Nordic Aqua 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 Nordic Aqua Partners, you can compare the effects of market volatilities on Grieg Seafood and Nordic Aqua 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 Nordic Aqua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Nordic Aqua.
Diversification Opportunities for Grieg Seafood and Nordic Aqua
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grieg and Nordic is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Nordic Aqua Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Aqua Partners 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 Nordic Aqua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Aqua Partners has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Nordic Aqua go up and down completely randomly.
Pair Corralation between Grieg Seafood and Nordic Aqua
Assuming the 90 days trading horizon Grieg Seafood ASA is expected to under-perform the Nordic Aqua. But the stock apears to be less risky and, when comparing its historical volatility, Grieg Seafood ASA is 1.07 times less risky than Nordic Aqua. The stock trades about -0.01 of its potential returns per unit of risk. The Nordic Aqua Partners is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,050 in Nordic Aqua Partners on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Nordic Aqua Partners or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Nordic Aqua Partners
Performance |
| Timeline |
| Grieg Seafood ASA |
| Nordic Aqua Partners |
Grieg Seafood and Nordic Aqua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Nordic Aqua
The main advantage of trading using opposite Grieg Seafood and Nordic Aqua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Nordic Aqua 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 Nordic Aqua will offset losses from the drop in Nordic Aqua'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 |
| Nordic Aqua vs. Andfjord Salmon AS | Nordic Aqua vs. Elkem ASA | Nordic Aqua vs. Integrated Wind Solutions | Nordic Aqua 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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