Correlation Between Mowi ASA and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and COFCO Joycome 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 Mowi ASA and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and COFCO Joycome Foods, you can compare the effects of market volatilities on Mowi ASA and COFCO Joycome 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 Mowi ASA with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and COFCO Joycome.
Diversification Opportunities for Mowi ASA and COFCO Joycome
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mowi and COFCO is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Mowi 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 Mowi ASA are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Mowi ASA i.e., Mowi ASA and COFCO Joycome go up and down completely randomly.
Pair Corralation between Mowi ASA and COFCO Joycome
Assuming the 90 days horizon Mowi ASA is expected to generate 0.4 times more return on investment than COFCO Joycome. However, Mowi ASA is 2.5 times less risky than COFCO Joycome. It trades about -0.26 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.23 per unit of risk. If you would invest 1,750 in Mowi ASA on October 12, 2024 and sell it today you would lose (89.00) from holding Mowi ASA or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mowi ASA vs. COFCO Joycome Foods
Performance |
| Timeline |
| Mowi ASA |
| COFCO Joycome Foods |
Mowi ASA and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and COFCO Joycome
The main advantage of trading using opposite Mowi ASA and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.The idea behind Mowi ASA and COFCO Joycome Foods 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.| COFCO Joycome vs. Fukuyama Transporting Co | COFCO Joycome vs. USWE SPORTS AB | COFCO Joycome vs. Yuexiu Transport Infrastructure | COFCO Joycome vs. Gaztransport Technigaz SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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