Correlation Between Grieg Seafood and North Energy
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and North Energy 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 North Energy 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 North Energy ASA, you can compare the effects of market volatilities on Grieg Seafood and North Energy 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 North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and North Energy.
Diversification Opportunities for Grieg Seafood and North Energy
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grieg and North is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy 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 North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and North Energy go up and down completely randomly.
Pair Corralation between Grieg Seafood and North Energy
Assuming the 90 days trading horizon Grieg Seafood ASA is expected to under-perform the North Energy. In addition to that, Grieg Seafood is 1.71 times more volatile than North Energy ASA. It trades about -0.13 of its total potential returns per unit of risk. North Energy ASA is currently generating about 0.05 per unit of volatility. If you would invest 265.00 in North Energy ASA on September 1, 2024 and sell it today you would earn a total of 5.00 from holding North Energy ASA or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grieg Seafood ASA vs. North Energy ASA
Performance |
| Timeline |
| Grieg Seafood ASA |
| North Energy ASA |
Grieg Seafood and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and North Energy
The main advantage of trading using opposite Grieg Seafood and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy'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 |
| North Energy vs. Skue Sparebank | North Energy vs. Aasen Sparebank | North Energy vs. Proximar Seafood AS | North Energy vs. Nidaros Sparebank |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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