Correlation Between Nordic Aqua and Gigante Salmon
Can any of the company-specific risk be diversified away by investing in both Nordic Aqua and Gigante Salmon 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 Nordic Aqua and Gigante Salmon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Aqua Partners and Gigante Salmon AS, you can compare the effects of market volatilities on Nordic Aqua and Gigante Salmon 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 Nordic Aqua with a short position of Gigante Salmon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Aqua and Gigante Salmon.
Diversification Opportunities for Nordic Aqua and Gigante Salmon
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Gigante is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Aqua Partners and Gigante Salmon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigante Salmon AS and Nordic Aqua 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 Nordic Aqua Partners are associated (or correlated) with Gigante Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigante Salmon AS has no effect on the direction of Nordic Aqua i.e., Nordic Aqua and Gigante Salmon go up and down completely randomly.
Pair Corralation between Nordic Aqua and Gigante Salmon
Assuming the 90 days trading horizon Nordic Aqua is expected to generate 1.33 times less return on investment than Gigante Salmon. But when comparing it to its historical volatility, Nordic Aqua Partners is 1.06 times less risky than Gigante Salmon. It trades about 0.02 of its potential returns per unit of risk. Gigante Salmon AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 718.00 in Gigante Salmon AS on September 4, 2024 and sell it today you would earn a total of 82.00 from holding Gigante Salmon AS or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Nordic Aqua Partners vs. Gigante Salmon AS
Performance |
| Timeline |
| Nordic Aqua Partners |
| Gigante Salmon AS |
Nordic Aqua and Gigante Salmon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Aqua and Gigante Salmon
The main advantage of trading using opposite Nordic Aqua and Gigante Salmon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Aqua position performs unexpectedly, Gigante Salmon 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 Gigante Salmon will offset losses from the drop in Gigante Salmon's long position.| Nordic Aqua vs. SalMar ASA | Nordic Aqua vs. Austevoll Seafood ASA | Nordic Aqua vs. Icelandic Salmon As | Nordic Aqua vs. Masoval AS |
| Gigante Salmon vs. Andfjord Salmon AS | Gigante Salmon vs. Salmon Evolution Holding | Gigante Salmon vs. Biofish Holding AS | Gigante Salmon vs. Nordic Aqua Partners |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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