Correlation Between Lery Seafood and Pareto Bank
Can any of the company-specific risk be diversified away by investing in both Lery Seafood and Pareto Bank 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 Pareto Bank 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 Pareto Bank ASA, you can compare the effects of market volatilities on Lery Seafood and Pareto Bank 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 Pareto Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and Pareto Bank.
Diversification Opportunities for Lery Seafood and Pareto Bank
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lery and Pareto is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Pareto Bank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pareto Bank 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 Pareto Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pareto Bank ASA has no effect on the direction of Lery Seafood i.e., Lery Seafood and Pareto Bank go up and down completely randomly.
Pair Corralation between Lery Seafood and Pareto Bank
Assuming the 90 days trading horizon Lery Seafood Group is expected to generate 1.09 times more return on investment than Pareto Bank. However, Lery Seafood is 1.09 times more volatile than Pareto Bank ASA. It trades about 0.4 of its potential returns per unit of risk. Pareto Bank ASA is currently generating about 0.32 per unit of risk. If you would invest 4,864 in Lery Seafood Group on October 23, 2024 and sell it today you would earn a total of 406.00 from holding Lery Seafood Group or generate 8.35% 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. Pareto Bank ASA
Performance |
| Timeline |
| Lery Seafood Group |
| Pareto Bank ASA |
Lery Seafood and Pareto Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lery Seafood and Pareto Bank
The main advantage of trading using opposite Lery Seafood and Pareto Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lery Seafood position performs unexpectedly, Pareto Bank 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 Pareto Bank will offset losses from the drop in Pareto Bank'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 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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