Correlation Between Power Metal and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Power Metal 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 Power Metal and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Metal Resources and Grieg Seafood, you can compare the effects of market volatilities on Power Metal 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 Power Metal with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Metal and Grieg Seafood.
Diversification Opportunities for Power Metal and Grieg Seafood
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Power and Grieg is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Power Metal Resources and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Power Metal 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 Power Metal Resources 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 has no effect on the direction of Power Metal i.e., Power Metal and Grieg Seafood go up and down completely randomly.
Pair Corralation between Power Metal and Grieg Seafood
Assuming the 90 days trading horizon Power Metal is expected to generate 3.04 times less return on investment than Grieg Seafood. In addition to that, Power Metal is 1.53 times more volatile than Grieg Seafood. It trades about 0.01 of its total potential returns per unit of risk. Grieg Seafood is currently generating about 0.04 per unit of volatility. If you would invest 5,815 in Grieg Seafood on August 30, 2024 and sell it today you would earn a total of 185.00 from holding Grieg Seafood or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Metal Resources vs. Grieg Seafood
Performance |
| Timeline |
| Power Metal Resources |
| Grieg Seafood |
Power Metal and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Metal and Grieg Seafood
The main advantage of trading using opposite Power Metal and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Metal 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.| Power Metal vs. Givaudan SA | Power Metal vs. Antofagasta PLC | Power Metal vs. Centamin PLC | Power Metal vs. Atalaya Mining |
| Grieg Seafood vs. Tungsten West PLC | Grieg Seafood vs. Argo Group Limited | Grieg Seafood vs. Hardide PLC | Grieg Seafood vs. Versarien PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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