Correlation Between NCC Group and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both NCC Group 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 NCC Group and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NCC Group plc and Grieg Seafood, you can compare the effects of market volatilities on NCC Group 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 NCC Group with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCC Group and Grieg Seafood.
Diversification Opportunities for NCC Group and Grieg Seafood
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NCC and Grieg is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NCC Group plc and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and NCC Group 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 NCC Group plc 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 has no effect on the direction of NCC Group i.e., NCC Group and Grieg Seafood go up and down completely randomly.
Pair Corralation between NCC Group and Grieg Seafood
Assuming the 90 days trading horizon NCC Group plc is expected to generate 1.13 times more return on investment than Grieg Seafood. However, NCC Group is 1.13 times more volatile than Grieg Seafood. It trades about 0.0 of its potential returns per unit of risk. Grieg Seafood is currently generating about -0.01 per unit of risk. If you would invest 17,600 in NCC Group plc on October 13, 2024 and sell it today you would lose (3,760) from holding NCC Group plc or give up 21.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NCC Group plc vs. Grieg Seafood
Performance |
| Timeline |
| NCC Group plc |
| Grieg Seafood |
NCC Group and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCC Group and Grieg Seafood
The main advantage of trading using opposite NCC Group and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCC Group 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.| NCC Group vs. Grieg Seafood | NCC Group vs. Dairy Farm International | NCC Group vs. Premier Foods PLC | NCC Group vs. Capital Metals PLC |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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