Correlation Between Grieg Seafood and Salmon Evolution
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Salmon Evolution 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 Salmon Evolution 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 Salmon Evolution Holding, you can compare the effects of market volatilities on Grieg Seafood and Salmon Evolution 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 Salmon Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Salmon Evolution.
Diversification Opportunities for Grieg Seafood and Salmon Evolution
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grieg and Salmon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Salmon Evolution Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salmon Evolution Holding 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 Salmon Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salmon Evolution Holding has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Salmon Evolution go up and down completely randomly.
Pair Corralation between Grieg Seafood and Salmon Evolution
Assuming the 90 days trading horizon Grieg Seafood ASA is expected to generate 1.6 times more return on investment than Salmon Evolution. However, Grieg Seafood is 1.6 times more volatile than Salmon Evolution Holding. It trades about -0.01 of its potential returns per unit of risk. Salmon Evolution Holding is currently generating about -0.02 per unit of risk. If you would invest 6,796 in Grieg Seafood ASA on November 27, 2024 and sell it today you would lose (1,916) from holding Grieg Seafood ASA or give up 28.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Salmon Evolution Holding
Performance |
| Timeline |
| Grieg Seafood ASA |
| Salmon Evolution Holding |
Grieg Seafood and Salmon Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Salmon Evolution
The main advantage of trading using opposite Grieg Seafood and Salmon Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Salmon Evolution 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 Salmon Evolution will offset losses from the drop in Salmon Evolution'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 |
| Salmon Evolution vs. Melhus Sparebank | Salmon Evolution vs. Romsdal Sparebank | Salmon Evolution vs. Aurskog Sparebank | Salmon Evolution vs. Helgeland 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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