Correlation Between Mowi ASA and Arctic Fish
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Arctic Fish 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 Arctic Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Arctic Fish Holding, you can compare the effects of market volatilities on Mowi ASA and Arctic Fish 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 Arctic Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Arctic Fish.
Diversification Opportunities for Mowi ASA and Arctic Fish
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mowi and Arctic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Arctic Fish Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Fish Holding 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 Arctic Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Fish Holding has no effect on the direction of Mowi ASA i.e., Mowi ASA and Arctic Fish go up and down completely randomly.
Pair Corralation between Mowi ASA and Arctic Fish
Assuming the 90 days trading horizon Mowi ASA is expected to generate 0.27 times more return on investment than Arctic Fish. However, Mowi ASA is 3.72 times less risky than Arctic Fish. It trades about 0.26 of its potential returns per unit of risk. Arctic Fish Holding is currently generating about 0.01 per unit of risk. If you would invest 18,759 in Mowi ASA on September 1, 2024 and sell it today you would earn a total of 1,281 from holding Mowi ASA or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mowi ASA vs. Arctic Fish Holding
Performance |
| Timeline |
| Mowi ASA |
| Arctic Fish Holding |
Mowi ASA and Arctic Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Arctic Fish
The main advantage of trading using opposite Mowi ASA and Arctic Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Arctic Fish 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 Arctic Fish will offset losses from the drop in Arctic Fish's long position.| Mowi ASA vs. SalMar ASA | Mowi ASA vs. Lery Seafood Group | Mowi ASA vs. Pf Bakkafrost | Mowi ASA vs. Grieg Seafood ASA |
| Arctic Fish vs. Andfjord Salmon AS | Arctic Fish vs. Elkem ASA | Arctic Fish vs. Integrated Wind Solutions | Arctic Fish vs. Vow 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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