Correlation Between Mowi ASA and Archer Daniels
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Archer Daniels 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 Mowi ASA and Archer Daniels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA ADR and Archer Daniels Midland, you can compare the effects of market volatilities on Mowi ASA and Archer Daniels 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 Mowi ASA with a short position of Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Archer Daniels.
Diversification Opportunities for Mowi ASA and Archer Daniels
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mowi and Archer is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA ADR and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland and Mowi ASA 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 Mowi ASA ADR are associated (or correlated) with Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Mowi ASA i.e., Mowi ASA and Archer Daniels go up and down completely randomly.
Pair Corralation between Mowi ASA and Archer Daniels
Assuming the 90 days horizon Mowi ASA ADR is expected to generate 0.94 times more return on investment than Archer Daniels. However, Mowi ASA ADR is 1.06 times less risky than Archer Daniels. It trades about 0.18 of its potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.04 per unit of risk. If you would invest 1,548 in Mowi ASA ADR on August 24, 2024 and sell it today you would earn a total of 213.00 from holding Mowi ASA ADR or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 9.07% |
| Values | Daily Returns |
Mowi ASA ADR vs. Archer Daniels Midland
Performance |
| Timeline |
| Mowi ASA ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Archer Daniels Midland |
Mowi ASA and Archer Daniels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Archer Daniels
The main advantage of trading using opposite Mowi ASA and Archer Daniels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Archer Daniels 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 Archer Daniels will offset losses from the drop in Archer Daniels' long position.| Mowi ASA vs. Compagnie Generale des | Mowi ASA vs. Adecco Group | Mowi ASA vs. Sandvik AB ADR | Mowi ASA vs. Central Japan Railway |
| Archer Daniels vs. Adecoagro SA | Archer Daniels vs. Cal Maine Foods | Archer Daniels vs. Tyson Foods | Archer Daniels vs. Fresh Del Monte |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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