Correlation Between Mowi ASA and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and SalMar ASA 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 SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and SalMar ASA, you can compare the effects of market volatilities on Mowi ASA and SalMar ASA 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and SalMar ASA.
Diversification Opportunities for Mowi ASA and SalMar ASA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mowi and SalMar is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Mowi ASA i.e., Mowi ASA and SalMar ASA go up and down completely randomly.
Pair Corralation between Mowi ASA and SalMar ASA
Assuming the 90 days trading horizon Mowi ASA is expected to generate 0.98 times more return on investment than SalMar ASA. However, Mowi ASA is 1.02 times less risky than SalMar ASA. It trades about 0.32 of its potential returns per unit of risk. SalMar ASA is currently generating about 0.24 per unit of risk. If you would invest 19,600 in Mowi ASA on October 20, 2024 and sell it today you would earn a total of 1,430 from holding Mowi ASA or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mowi ASA vs. SalMar ASA
Performance |
| Timeline |
| Mowi ASA |
| SalMar ASA |
Mowi ASA and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and SalMar ASA
The main advantage of trading using opposite Mowi ASA and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA'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 |
| SalMar ASA vs. Mowi ASA | SalMar ASA vs. Lery Seafood Group | SalMar ASA vs. Pf Bakkafrost | SalMar ASA vs. Grieg Seafood 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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