Correlation Between Nordic Mining and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Nordic Mining 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 Nordic Mining and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Mining ASA and Grieg Seafood ASA, you can compare the effects of market volatilities on Nordic Mining 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 Nordic Mining with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Grieg Seafood.
Diversification Opportunities for Nordic Mining and Grieg Seafood
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nordic and Grieg is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Grieg Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood ASA and Nordic Mining 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 Mining ASA 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 ASA has no effect on the direction of Nordic Mining i.e., Nordic Mining and Grieg Seafood go up and down completely randomly.
Pair Corralation between Nordic Mining and Grieg Seafood
Assuming the 90 days trading horizon Nordic Mining ASA is expected to under-perform the Grieg Seafood. In addition to that, Nordic Mining is 1.03 times more volatile than Grieg Seafood ASA. It trades about -0.67 of its total potential returns per unit of risk. Grieg Seafood ASA is currently generating about -0.05 per unit of volatility. If you would invest 6,210 in Grieg Seafood ASA on October 25, 2024 and sell it today you would lose (125.00) from holding Grieg Seafood ASA or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Grieg Seafood ASA
Performance |
| Timeline |
| Nordic Mining ASA |
| Grieg Seafood ASA |
Nordic Mining and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Grieg Seafood
The main advantage of trading using opposite Nordic Mining and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining 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.| Nordic Mining vs. Clean Seas Seafood | Nordic Mining vs. BW Offshore | Nordic Mining vs. Instabank ASA | Nordic Mining vs. Jaeren Sparebank |
| Grieg Seafood vs. Lery Seafood Group | Grieg Seafood vs. SalMar ASA | Grieg Seafood vs. Austevoll Seafood ASA | Grieg Seafood vs. Mowi 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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