Correlation Between Mowi ASA and Lery Seafood
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Lery 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 Mowi ASA and Lery Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Lery Seafood Group, you can compare the effects of market volatilities on Mowi ASA and Lery 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 Mowi ASA with a short position of Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Lery Seafood.
Diversification Opportunities for Mowi ASA and Lery Seafood
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mowi and Lery is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Mowi ASA i.e., Mowi ASA and Lery Seafood go up and down completely randomly.
Pair Corralation between Mowi ASA and Lery Seafood
Assuming the 90 days horizon Mowi ASA is expected to generate 1.25 times more return on investment than Lery Seafood. However, Mowi ASA is 1.25 times more volatile than Lery Seafood Group. It trades about 0.12 of its potential returns per unit of risk. Lery Seafood Group is currently generating about -0.04 per unit of risk. If you would invest 1,496 in Mowi ASA on October 11, 2024 and sell it today you would earn a total of 155.00 from holding Mowi ASA or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mowi ASA vs. Lery Seafood Group
Performance |
| Timeline |
| Mowi ASA |
| Lery Seafood Group |
Mowi ASA and Lery Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Lery Seafood
The main advantage of trading using opposite Mowi ASA and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Lery 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.The idea behind Mowi ASA and Lery Seafood Group 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.| Lery Seafood vs. Mowi ASA | Lery Seafood vs. LEROY SEAFOOD GRUNSPADR | Lery Seafood vs. Yihai International Holding | Lery Seafood vs. Lery Seafood Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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