Correlation Between Grieg Seafood and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and SalMar 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 SalMar 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 SalMar ASA, you can compare the effects of market volatilities on Grieg Seafood and SalMar 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and SalMar ASA.
Diversification Opportunities for Grieg Seafood and SalMar ASA
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grieg and SalMar is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and SalMar ASA go up and down completely randomly.
Pair Corralation between Grieg Seafood and SalMar ASA
Assuming the 90 days trading horizon Grieg Seafood ASA is expected to generate 1.48 times more return on investment than SalMar ASA. However, Grieg Seafood is 1.48 times more volatile than SalMar ASA. It trades about 0.2 of its potential returns per unit of risk. SalMar ASA is currently generating about 0.24 per unit of risk. If you would invest 6,055 in Grieg Seafood ASA on October 20, 2024 and sell it today you would earn a total of 395.00 from holding Grieg Seafood ASA or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood ASA vs. SalMar ASA
Performance |
| Timeline |
| Grieg Seafood ASA |
| SalMar ASA |
Grieg Seafood and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and SalMar ASA
The main advantage of trading using opposite Grieg Seafood and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, SalMar 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 SalMar ASA will offset losses from the drop in SalMar 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 |
| SalMar ASA vs. Mowi ASA | SalMar ASA vs. Lery Seafood Group | SalMar ASA vs. Pf Bakkafrost | SalMar ASA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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