Correlation Between Mowi ASA and Cool Company
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Cool Company 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 Cool Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Cool Company Oy, you can compare the effects of market volatilities on Mowi ASA and Cool Company 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 Cool Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Cool Company.
Diversification Opportunities for Mowi ASA and Cool Company
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mowi and Cool is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Cool Company Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company Oy 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 Cool Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company Oy has no effect on the direction of Mowi ASA i.e., Mowi ASA and Cool Company go up and down completely randomly.
Pair Corralation between Mowi ASA and Cool Company
Assuming the 90 days trading horizon Mowi ASA is expected to generate 0.37 times more return on investment than Cool Company. However, Mowi ASA is 2.72 times less risky than Cool Company. It trades about 0.16 of its potential returns per unit of risk. Cool Company Oy is currently generating about -0.16 per unit of risk. If you would invest 19,216 in Mowi ASA on August 31, 2024 and sell it today you would earn a total of 894.00 from holding Mowi ASA or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mowi ASA vs. Cool Company Oy
Performance |
| Timeline |
| Mowi ASA |
| Cool Company Oy |
Mowi ASA and Cool Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Cool Company
The main advantage of trading using opposite Mowi ASA and Cool Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Cool Company 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 Cool Company will offset losses from the drop in Cool Company'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 |
| Cool Company vs. Aasen Sparebank | Cool Company vs. Morrow Bank ASA | Cool Company vs. BW Offshore | Cool Company vs. Sunndal Sparebank |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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