Correlation Between Brasilagro Adr and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Brasilagro Adr and SalMar ASA 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 Brasilagro Adr and SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brasilagro Adr and SalMar ASA, you can compare the effects of market volatilities on Brasilagro Adr and SalMar ASA 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 Brasilagro Adr with a short position of SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brasilagro Adr and SalMar ASA.
Diversification Opportunities for Brasilagro Adr and SalMar ASA
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brasilagro and SalMar is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Brasilagro Adr and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA and Brasilagro Adr 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 Brasilagro Adr are associated (or correlated) with SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Brasilagro Adr i.e., Brasilagro Adr and SalMar ASA go up and down completely randomly.
Pair Corralation between Brasilagro Adr and SalMar ASA
Considering the 90-day investment horizon Brasilagro Adr is expected to generate 1.8 times less return on investment than SalMar ASA. But when comparing it to its historical volatility, Brasilagro Adr is 3.89 times less risky than SalMar ASA. It trades about 0.24 of its potential returns per unit of risk. SalMar ASA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,195 in SalMar ASA on November 2, 2024 and sell it today you would earn a total of 89.00 from holding SalMar ASA or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brasilagro Adr vs. SalMar ASA
Performance |
| Timeline |
| Brasilagro Adr |
| SalMar ASA |
Brasilagro Adr and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brasilagro Adr and SalMar ASA
The main advantage of trading using opposite Brasilagro Adr and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brasilagro Adr position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Brasilagro Adr vs. Austevoll Seafood ASA | Brasilagro Adr vs. Golden Agri Resources | Brasilagro Adr vs. SalMar ASA | Brasilagro Adr vs. Wilmar International |
| SalMar ASA vs. SLC Agricola SA | SalMar ASA vs. Cal Maine Foods | SalMar ASA vs. Bunge Limited | SalMar ASA vs. Austevoll 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |