Correlation Between Neometals and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Neometals 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 Neometals and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neometals and Grieg Seafood, you can compare the effects of market volatilities on Neometals 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 Neometals with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neometals and Grieg Seafood.
Diversification Opportunities for Neometals and Grieg Seafood
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neometals and Grieg is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Neometals 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 Neometals 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 Neometals i.e., Neometals and Grieg Seafood go up and down completely randomly.
Pair Corralation between Neometals and Grieg Seafood
Assuming the 90 days trading horizon Neometals is expected to under-perform the Grieg Seafood. In addition to that, Neometals is 1.77 times more volatile than Grieg Seafood. It trades about -0.08 of its total potential returns per unit of risk. Grieg Seafood is currently generating about -0.02 per unit of volatility. If you would invest 7,179 in Grieg Seafood on November 27, 2024 and sell it today you would lose (2,302) from holding Grieg Seafood or give up 32.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.05% |
| Values | Daily Returns |
Neometals vs. Grieg Seafood
Performance |
| Timeline |
| Neometals |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Grieg Seafood |
Neometals and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neometals and Grieg Seafood
The main advantage of trading using opposite Neometals and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals 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.| Neometals vs. Eastinco Mining Exploration | Neometals vs. Griffin Mining | Neometals vs. Endeavour Mining Corp | Neometals vs. Gamma Communications PLC |
| Grieg Seafood vs. PPHE Hotel Group | Grieg Seafood vs. United Airlines Holdings | Grieg Seafood vs. Ion Beam Applications | Grieg Seafood vs. Melia Hotels |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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