Correlation Between Icelandic Salmon and Atlantic Sapphire
Can any of the company-specific risk be diversified away by investing in both Icelandic Salmon and Atlantic Sapphire 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 Icelandic Salmon and Atlantic Sapphire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icelandic Salmon As and Atlantic Sapphire As, you can compare the effects of market volatilities on Icelandic Salmon and Atlantic Sapphire 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 Icelandic Salmon with a short position of Atlantic Sapphire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icelandic Salmon and Atlantic Sapphire.
Diversification Opportunities for Icelandic Salmon and Atlantic Sapphire
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icelandic and Atlantic is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Icelandic Salmon As and Atlantic Sapphire As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Sapphire and Icelandic Salmon 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 Icelandic Salmon As are associated (or correlated) with Atlantic Sapphire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Sapphire has no effect on the direction of Icelandic Salmon i.e., Icelandic Salmon and Atlantic Sapphire go up and down completely randomly.
Pair Corralation between Icelandic Salmon and Atlantic Sapphire
Assuming the 90 days trading horizon Icelandic Salmon As is expected to generate 0.11 times more return on investment than Atlantic Sapphire. However, Icelandic Salmon As is 8.8 times less risky than Atlantic Sapphire. It trades about 0.03 of its potential returns per unit of risk. Atlantic Sapphire As is currently generating about -0.06 per unit of risk. If you would invest 11,800 in Icelandic Salmon As on August 25, 2024 and sell it today you would earn a total of 700.00 from holding Icelandic Salmon As or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icelandic Salmon As vs. Atlantic Sapphire As
Performance |
| Timeline |
| Icelandic Salmon |
| Atlantic Sapphire |
Icelandic Salmon and Atlantic Sapphire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icelandic Salmon and Atlantic Sapphire
The main advantage of trading using opposite Icelandic Salmon and Atlantic Sapphire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icelandic Salmon position performs unexpectedly, Atlantic Sapphire 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 Atlantic Sapphire will offset losses from the drop in Atlantic Sapphire's long position.| Icelandic Salmon vs. Andfjord Salmon AS | Icelandic Salmon vs. Arctic Fish Holding | Icelandic Salmon vs. Ice Fish Farm | Icelandic Salmon vs. Elkem ASA |
| Atlantic Sapphire vs. Grieg Seafood ASA | Atlantic Sapphire vs. Mowi ASA | Atlantic Sapphire vs. SalMar ASA | Atlantic Sapphire vs. Pf Bakkafrost |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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