Correlation Between Lery Seafood and Pf Bakkafrost
Can any of the company-specific risk be diversified away by investing in both Lery Seafood and Pf Bakkafrost 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 Lery Seafood and Pf Bakkafrost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lery Seafood Group and Pf Bakkafrost, you can compare the effects of market volatilities on Lery Seafood and Pf Bakkafrost 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 Lery Seafood with a short position of Pf Bakkafrost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and Pf Bakkafrost.
Diversification Opportunities for Lery Seafood and Pf Bakkafrost
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lery and BAKKA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Pf Bakkafrost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pf Bakkafrost and Lery Seafood 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 Lery Seafood Group are associated (or correlated) with Pf Bakkafrost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pf Bakkafrost has no effect on the direction of Lery Seafood i.e., Lery Seafood and Pf Bakkafrost go up and down completely randomly.
Pair Corralation between Lery Seafood and Pf Bakkafrost
Assuming the 90 days trading horizon Lery Seafood is expected to generate 1.2 times less return on investment than Pf Bakkafrost. In addition to that, Lery Seafood is 1.16 times more volatile than Pf Bakkafrost. It trades about 0.05 of its total potential returns per unit of risk. Pf Bakkafrost is currently generating about 0.06 per unit of volatility. If you would invest 58,800 in Pf Bakkafrost on August 25, 2024 and sell it today you would earn a total of 7,000 from holding Pf Bakkafrost or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lery Seafood Group vs. Pf Bakkafrost
Performance |
| Timeline |
| Lery Seafood Group |
| Pf Bakkafrost |
Lery Seafood and Pf Bakkafrost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lery Seafood and Pf Bakkafrost
The main advantage of trading using opposite Lery Seafood and Pf Bakkafrost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lery Seafood position performs unexpectedly, Pf Bakkafrost 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 Pf Bakkafrost will offset losses from the drop in Pf Bakkafrost's long position.| Lery Seafood vs. Grieg Seafood ASA | Lery Seafood vs. SalMar ASA | Lery Seafood vs. Pf Bakkafrost | Lery Seafood vs. Mowi ASA |
| Pf Bakkafrost vs. SalMar ASA | Pf Bakkafrost vs. Mowi ASA | Pf Bakkafrost vs. Lery Seafood Group | Pf Bakkafrost 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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