Correlation Between Norwegian Block and Mowi ASA
Can any of the company-specific risk be diversified away by investing in both Norwegian Block and Mowi 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 Norwegian Block and Mowi ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Block Exchange and Mowi ASA, you can compare the effects of market volatilities on Norwegian Block and Mowi 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 Norwegian Block with a short position of Mowi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Block and Mowi ASA.
Diversification Opportunities for Norwegian Block and Mowi ASA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norwegian and Mowi is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Block Exchange and Mowi ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mowi ASA and Norwegian Block 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 Norwegian Block Exchange are associated (or correlated) with Mowi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mowi ASA has no effect on the direction of Norwegian Block i.e., Norwegian Block and Mowi ASA go up and down completely randomly.
Pair Corralation between Norwegian Block and Mowi ASA
Assuming the 90 days trading horizon Norwegian Block is expected to generate 1.13 times less return on investment than Mowi ASA. In addition to that, Norwegian Block is 6.71 times more volatile than Mowi ASA. It trades about 0.0 of its total potential returns per unit of risk. Mowi ASA is currently generating about 0.03 per unit of volatility. If you would invest 18,408 in Mowi ASA on August 29, 2024 and sell it today you would earn a total of 1,592 from holding Mowi ASA or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Block Exchange vs. Mowi ASA
Performance |
| Timeline |
| Norwegian Block Exchange |
| Mowi ASA |
Norwegian Block and Mowi ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Block and Mowi ASA
The main advantage of trading using opposite Norwegian Block and Mowi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Block position performs unexpectedly, Mowi 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 Mowi ASA will offset losses from the drop in Mowi ASA's long position.| Norwegian Block vs. Bergen Carbon Solutions | Norwegian Block vs. Aker Horizons AS | Norwegian Block vs. North Energy ASA | Norwegian Block vs. Sparebanken Sor |
| Mowi ASA vs. Andfjord Salmon AS | Mowi ASA vs. Elkem ASA | Mowi ASA vs. Vow ASA | Mowi ASA vs. North Energy 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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