Correlation Between Lery Seafood and Bien Sparebank
Can any of the company-specific risk be diversified away by investing in both Lery Seafood and Bien Sparebank 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 Bien Sparebank 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 Bien Sparebank ASA, you can compare the effects of market volatilities on Lery Seafood and Bien Sparebank 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 Bien Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and Bien Sparebank.
Diversification Opportunities for Lery Seafood and Bien Sparebank
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lery and Bien is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Bien Sparebank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bien Sparebank ASA 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 Bien Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bien Sparebank ASA has no effect on the direction of Lery Seafood i.e., Lery Seafood and Bien Sparebank go up and down completely randomly.
Pair Corralation between Lery Seafood and Bien Sparebank
Assuming the 90 days trading horizon Lery Seafood Group is expected to generate 0.56 times more return on investment than Bien Sparebank. However, Lery Seafood Group is 1.8 times less risky than Bien Sparebank. It trades about 0.5 of its potential returns per unit of risk. Bien Sparebank ASA is currently generating about 0.09 per unit of risk. If you would invest 4,942 in Lery Seafood Group on November 4, 2024 and sell it today you would earn a total of 673.00 from holding Lery Seafood Group or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lery Seafood Group vs. Bien Sparebank ASA
Performance |
| Timeline |
| Lery Seafood Group |
| Bien Sparebank ASA |
Lery Seafood and Bien Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lery Seafood and Bien Sparebank
The main advantage of trading using opposite Lery Seafood and Bien Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lery Seafood position performs unexpectedly, Bien Sparebank 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 Bien Sparebank will offset losses from the drop in Bien Sparebank's long position.| Lery Seafood vs. SalMar ASA | Lery Seafood vs. Grieg Seafood ASA | Lery Seafood vs. Austevoll Seafood ASA | Lery Seafood vs. Mowi ASA |
| Bien Sparebank vs. SD Standard Drilling | Bien Sparebank vs. Grong Sparebank | Bien Sparebank vs. Morrow Bank ASA | Bien Sparebank vs. SpareBank 1 stlandet |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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