Correlation Between Lery Seafood and Nidaros Sparebank
Can any of the company-specific risk be diversified away by investing in both Lery Seafood and Nidaros 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 Nidaros 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 Nidaros Sparebank, you can compare the effects of market volatilities on Lery Seafood and Nidaros 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 Nidaros Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and Nidaros Sparebank.
Diversification Opportunities for Lery Seafood and Nidaros Sparebank
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lery and Nidaros is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Nidaros Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidaros Sparebank 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 Nidaros Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidaros Sparebank has no effect on the direction of Lery Seafood i.e., Lery Seafood and Nidaros Sparebank go up and down completely randomly.
Pair Corralation between Lery Seafood and Nidaros Sparebank
Assuming the 90 days trading horizon Lery Seafood Group is expected to generate 1.05 times more return on investment than Nidaros Sparebank. However, Lery Seafood is 1.05 times more volatile than Nidaros Sparebank. It trades about 0.07 of its potential returns per unit of risk. Nidaros Sparebank is currently generating about 0.0 per unit of risk. If you would invest 3,889 in Lery Seafood Group on September 2, 2024 and sell it today you would earn a total of 1,261 from holding Lery Seafood Group or generate 32.42% 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. Nidaros Sparebank
Performance |
| Timeline |
| Lery Seafood Group |
| Nidaros Sparebank |
Lery Seafood and Nidaros Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lery Seafood and Nidaros Sparebank
The main advantage of trading using opposite Lery Seafood and Nidaros Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lery Seafood position performs unexpectedly, Nidaros 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 Nidaros Sparebank will offset losses from the drop in Nidaros 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 |
| Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebank 1 Nord Norge | Nidaros Sparebank vs. Sparebanken Vest | Nidaros Sparebank vs. Sparebank 1 Ostfold |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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