Correlation Between Icelandic Salmon and Ice Fish
Can any of the company-specific risk be diversified away by investing in both Icelandic Salmon and Ice 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 Icelandic Salmon and Ice Fish 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 Ice Fish Farm, you can compare the effects of market volatilities on Icelandic Salmon and Ice 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 Icelandic Salmon with a short position of Ice Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icelandic Salmon and Ice Fish.
Diversification Opportunities for Icelandic Salmon and Ice Fish
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icelandic and Ice is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Icelandic Salmon As and Ice Fish Farm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ice Fish Farm 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 Ice Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ice Fish Farm has no effect on the direction of Icelandic Salmon i.e., Icelandic Salmon and Ice Fish go up and down completely randomly.
Pair Corralation between Icelandic Salmon and Ice Fish
Assuming the 90 days trading horizon Icelandic Salmon As is expected to under-perform the Ice Fish. But the stock apears to be less risky and, when comparing its historical volatility, Icelandic Salmon As is 2.33 times less risky than Ice Fish. The stock trades about -0.03 of its potential returns per unit of risk. The Ice Fish Farm is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Ice Fish Farm on September 1, 2024 and sell it today you would earn a total of 240.00 from holding Ice Fish Farm or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Icelandic Salmon As vs. Ice Fish Farm
Performance |
| Timeline |
| Icelandic Salmon |
| Ice Fish Farm |
Icelandic Salmon and Ice Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icelandic Salmon and Ice Fish
The main advantage of trading using opposite Icelandic Salmon and Ice Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icelandic Salmon position performs unexpectedly, Ice 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 Ice Fish will offset losses from the drop in Ice Fish's long position.| Icelandic Salmon vs. Ice Fish Farm | Icelandic Salmon vs. Arctic Fish Holding | Icelandic Salmon vs. Salmon Evolution Holding | Icelandic Salmon vs. Grieg Seafood ASA |
| Ice Fish vs. Icelandic Salmon As | Ice Fish vs. Arctic Fish Holding | Ice Fish vs. Salmon Evolution Holding | Ice Fish 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |