Correlation Between Mowi ASA and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Grieg Seafood 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 Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Grieg Seafood ASA, you can compare the effects of market volatilities on Mowi ASA and Grieg Seafood 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 Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Grieg Seafood.
Diversification Opportunities for Mowi ASA and Grieg Seafood
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mowi and Grieg is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Grieg Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood ASA 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 Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood ASA has no effect on the direction of Mowi ASA i.e., Mowi ASA and Grieg Seafood go up and down completely randomly.
Pair Corralation between Mowi ASA and Grieg Seafood
Assuming the 90 days trading horizon Mowi ASA is expected to generate 0.54 times more return on investment than Grieg Seafood. However, Mowi ASA is 1.86 times less risky than Grieg Seafood. It trades about 0.04 of its potential returns per unit of risk. Grieg Seafood ASA is currently generating about -0.27 per unit of risk. If you would invest 19,761 in Mowi ASA on August 29, 2024 and sell it today you would earn a total of 239.00 from holding Mowi ASA or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mowi ASA vs. Grieg Seafood ASA
Performance |
| Timeline |
| Mowi ASA |
| Grieg Seafood ASA |
Mowi ASA and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Grieg Seafood
The main advantage of trading using opposite Mowi ASA and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Mowi ASA vs. Andfjord Salmon AS | Mowi ASA vs. Elkem ASA | Mowi ASA vs. Vow ASA | Mowi ASA vs. North Energy ASA |
| Grieg Seafood vs. Lery Seafood Group | Grieg Seafood vs. SalMar ASA | Grieg Seafood vs. Austevoll Seafood ASA | Grieg 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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