Correlation Between Orkla ASA and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Orkla ASA 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 Orkla ASA and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orkla ASA and Grieg Seafood ASA, you can compare the effects of market volatilities on Orkla ASA 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 Orkla ASA with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orkla ASA and Grieg Seafood.
Diversification Opportunities for Orkla ASA and Grieg Seafood
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orkla and Grieg is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Orkla 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 Orkla ASA 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 Orkla 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 Orkla ASA i.e., Orkla ASA and Grieg Seafood go up and down completely randomly.
Pair Corralation between Orkla ASA and Grieg Seafood
Assuming the 90 days trading horizon Orkla ASA is expected to generate 0.44 times more return on investment than Grieg Seafood. However, Orkla ASA is 2.28 times less risky than Grieg Seafood. It trades about 0.04 of its potential returns per unit of risk. Grieg Seafood ASA is currently generating about -0.01 per unit of risk. If you would invest 9,875 in Orkla ASA on August 28, 2024 and sell it today you would earn a total of 155.00 from holding Orkla ASA or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orkla ASA vs. Grieg Seafood ASA
Performance |
| Timeline |
| Orkla ASA |
| Grieg Seafood ASA |
Orkla ASA and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orkla ASA and Grieg Seafood
The main advantage of trading using opposite Orkla ASA and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orkla ASA 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.The idea behind Orkla ASA and Grieg Seafood ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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