Correlation Between Mowi ASA and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Wilmar International 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 Wilmar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Wilmar International Limited, you can compare the effects of market volatilities on Mowi ASA and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Wilmar International.
Diversification Opportunities for Mowi ASA and Wilmar International
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mowi and Wilmar is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 are associated (or correlated) with Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Mowi ASA i.e., Mowi ASA and Wilmar International go up and down completely randomly.
Pair Corralation between Mowi ASA and Wilmar International
Assuming the 90 days horizon Mowi ASA is expected to generate 1.38 times less return on investment than Wilmar International. But when comparing it to its historical volatility, Mowi ASA is 2.34 times less risky than Wilmar International. It trades about 0.04 of its potential returns per unit of risk. Wilmar International Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 218.00 in Wilmar International Limited on November 5, 2024 and sell it today you would earn a total of 8.00 from holding Wilmar International Limited or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.1% |
| Values | Daily Returns |
Mowi ASA vs. Wilmar International Limited
Performance |
| Timeline |
| Mowi ASA |
| Wilmar International |
Mowi ASA and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Wilmar International
The main advantage of trading using opposite Mowi ASA and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| Mowi ASA vs. Fresh Del Monte | Mowi ASA vs. Adecoagro SA | Mowi ASA vs. Limoneira Co | Mowi ASA vs. Tyson Foods |
| Wilmar International vs. Fresh Del Monte | Wilmar International vs. Limoneira Co | Wilmar International vs. Brasilagro Adr | Wilmar International vs. Alico Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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