Correlation Between Ice Fish and Arctic Fish
Can any of the company-specific risk be diversified away by investing in both Ice Fish and Arctic Fish 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 Ice Fish and Arctic Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ice Fish Farm and Arctic Fish Holding, you can compare the effects of market volatilities on Ice Fish and Arctic Fish 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 Ice Fish with a short position of Arctic Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ice Fish and Arctic Fish.
Diversification Opportunities for Ice Fish and Arctic Fish
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ice and Arctic is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ice Fish Farm and Arctic Fish Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Fish Holding and Ice Fish 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 Ice Fish Farm are associated (or correlated) with Arctic Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Fish Holding has no effect on the direction of Ice Fish i.e., Ice Fish and Arctic Fish go up and down completely randomly.
Pair Corralation between Ice Fish and Arctic Fish
Assuming the 90 days trading horizon Ice Fish is expected to generate 1.3 times less return on investment than Arctic Fish. But when comparing it to its historical volatility, Ice Fish Farm is 1.08 times less risky than Arctic Fish. It trades about 0.01 of its potential returns per unit of risk. Arctic Fish Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,050 in Arctic Fish Holding on August 29, 2024 and sell it today you would lose (50.00) from holding Arctic Fish Holding or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ice Fish Farm vs. Arctic Fish Holding
Performance |
| Timeline |
| Ice Fish Farm |
| Arctic Fish Holding |
Ice Fish and Arctic Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ice Fish and Arctic Fish
The main advantage of trading using opposite Ice Fish and Arctic Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ice Fish position performs unexpectedly, Arctic Fish 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 Arctic Fish will offset losses from the drop in Arctic Fish's long position.| Ice Fish vs. Icelandic Salmon As | Ice Fish vs. Arctic Fish Holding | Ice Fish vs. Salmon Evolution Holding | Ice Fish vs. Grieg Seafood ASA |
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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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