Correlation Between Kongsberg Gruppen and Lery Seafood
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Lery Seafood 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 Kongsberg Gruppen and Lery Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kongsberg Gruppen ASA and Lery Seafood Group, you can compare the effects of market volatilities on Kongsberg Gruppen and Lery Seafood 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 Kongsberg Gruppen with a short position of Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Lery Seafood.
Diversification Opportunities for Kongsberg Gruppen and Lery Seafood
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kongsberg and Lery is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and Kongsberg Gruppen 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 Kongsberg Gruppen ASA are associated (or correlated) with Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Lery Seafood go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Lery Seafood
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 1.34 times more return on investment than Lery Seafood. However, Kongsberg Gruppen is 1.34 times more volatile than Lery Seafood Group. It trades about 0.23 of its potential returns per unit of risk. Lery Seafood Group is currently generating about -0.04 per unit of risk. If you would invest 116,800 in Kongsberg Gruppen ASA on August 25, 2024 and sell it today you would earn a total of 12,000 from holding Kongsberg Gruppen ASA or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. Lery Seafood Group
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Lery Seafood Group |
Kongsberg Gruppen and Lery Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Lery Seafood
The main advantage of trading using opposite Kongsberg Gruppen and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Lery Seafood 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| Lery Seafood vs. Grieg Seafood ASA | Lery Seafood vs. SalMar ASA | Lery Seafood vs. Pf Bakkafrost | Lery Seafood 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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