Correlation Between SalMar ASA and Archer Daniels
Can any of the company-specific risk be diversified away by investing in both SalMar ASA and Archer Daniels 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 SalMar ASA and Archer Daniels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SalMar ASA and Archer Daniels Midland, you can compare the effects of market volatilities on SalMar ASA and Archer Daniels 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 SalMar ASA with a short position of Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of SalMar ASA and Archer Daniels.
Diversification Opportunities for SalMar ASA and Archer Daniels
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between SalMar and Archer is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SalMar ASA and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland and SalMar ASA 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 SalMar ASA are associated (or correlated) with Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of SalMar ASA i.e., SalMar ASA and Archer Daniels go up and down completely randomly.
Pair Corralation between SalMar ASA and Archer Daniels
Assuming the 90 days horizon SalMar ASA is expected to under-perform the Archer Daniels. In addition to that, SalMar ASA is 1.83 times more volatile than Archer Daniels Midland. It trades about -0.34 of its total potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.26 per unit of volatility. If you would invest 5,097 in Archer Daniels Midland on September 24, 2024 and sell it today you would lose (253.00) from holding Archer Daniels Midland or give up 4.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SalMar ASA vs. Archer Daniels Midland
Performance |
| Timeline |
| SalMar ASA |
| Archer Daniels Midland |
SalMar ASA and Archer Daniels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SalMar ASA and Archer Daniels
The main advantage of trading using opposite SalMar ASA and Archer Daniels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SalMar ASA position performs unexpectedly, Archer Daniels 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 Archer Daniels will offset losses from the drop in Archer Daniels' long position.| SalMar ASA vs. Salesforce | SalMar ASA vs. Insteel Industries | SalMar ASA vs. Lamar Advertising | SalMar ASA vs. MUTUIONLINE |
| Archer Daniels vs. Tyson Foods | Archer Daniels vs. Wilmar International Limited | Archer Daniels vs. MOWI ASA SPADR | Archer Daniels vs. Mowi 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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