Correlation Between LBG Media and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both LBG Media and Grieg 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 LBG Media and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LBG Media PLC and Grieg Seafood, you can compare the effects of market volatilities on LBG Media and Grieg 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 LBG Media with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Grieg Seafood.
Diversification Opportunities for LBG Media and Grieg Seafood
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LBG and Grieg is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and LBG Media 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 LBG Media PLC are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of LBG Media i.e., LBG Media and Grieg Seafood go up and down completely randomly.
Pair Corralation between LBG Media and Grieg Seafood
Assuming the 90 days trading horizon LBG Media PLC is expected to generate 0.64 times more return on investment than Grieg Seafood. However, LBG Media PLC is 1.56 times less risky than Grieg Seafood. It trades about -0.05 of its potential returns per unit of risk. Grieg Seafood is currently generating about -0.13 per unit of risk. If you would invest 13,000 in LBG Media PLC on September 1, 2024 and sell it today you would lose (300.00) from holding LBG Media PLC or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. Grieg Seafood
Performance |
| Timeline |
| LBG Media PLC |
| Grieg Seafood |
LBG Media and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Grieg Seafood
The main advantage of trading using opposite LBG Media and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, Grieg 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| LBG Media vs. Spotify Technology SA | LBG Media vs. Alfa Financial Software | LBG Media vs. Livermore Investments Group | LBG Media vs. DXC Technology Co |
| Grieg Seafood vs. Liberty Media Corp | Grieg Seafood vs. MediaZest plc | Grieg Seafood vs. Flutter Entertainment PLC | Grieg Seafood vs. LBG Media PLC |
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 Stocks Directory module to find actively traded stocks across global markets.
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