Correlation Between Lery Seafood and Goodtech
Can any of the company-specific risk be diversified away by investing in both Lery Seafood and Goodtech 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 Goodtech 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 Goodtech, you can compare the effects of market volatilities on Lery Seafood and Goodtech 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 Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and Goodtech.
Diversification Opportunities for Lery Seafood and Goodtech
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lery and Goodtech is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech 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 Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Lery Seafood i.e., Lery Seafood and Goodtech go up and down completely randomly.
Pair Corralation between Lery Seafood and Goodtech
Assuming the 90 days trading horizon Lery Seafood is expected to generate 2.83 times less return on investment than Goodtech. But when comparing it to its historical volatility, Lery Seafood Group is 1.24 times less risky than Goodtech. It trades about 0.01 of its potential returns per unit of risk. Goodtech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 789.00 in Goodtech on August 28, 2024 and sell it today you would earn a total of 111.00 from holding Goodtech or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lery Seafood Group vs. Goodtech
Performance |
| Timeline |
| Lery Seafood Group |
| Goodtech |
Lery Seafood and Goodtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lery Seafood and Goodtech
The main advantage of trading using opposite Lery Seafood and Goodtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lery Seafood position performs unexpectedly, Goodtech 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 Goodtech will offset losses from the drop in Goodtech's long position.The idea behind Lery Seafood Group and Goodtech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA | Goodtech vs. Elkem 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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