Correlation Between Salmon Evolution and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Salmon Evolution and SalMar ASA 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 Salmon Evolution and SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salmon Evolution Holding and SalMar ASA, you can compare the effects of market volatilities on Salmon Evolution and SalMar ASA 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 Salmon Evolution with a short position of SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salmon Evolution and SalMar ASA.
Diversification Opportunities for Salmon Evolution and SalMar ASA
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salmon and SalMar is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Salmon Evolution Holding and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA and Salmon Evolution 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 Salmon Evolution Holding are associated (or correlated) with SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Salmon Evolution i.e., Salmon Evolution and SalMar ASA go up and down completely randomly.
Pair Corralation between Salmon Evolution and SalMar ASA
Assuming the 90 days trading horizon Salmon Evolution Holding is expected to under-perform the SalMar ASA. In addition to that, Salmon Evolution is 1.01 times more volatile than SalMar ASA. It trades about -0.03 of its total potential returns per unit of risk. SalMar ASA is currently generating about -0.02 per unit of volatility. If you would invest 56,750 in SalMar ASA on September 19, 2024 and sell it today you would lose (600.00) from holding SalMar ASA or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salmon Evolution Holding vs. SalMar ASA
Performance |
| Timeline |
| Salmon Evolution Holding |
| SalMar ASA |
Salmon Evolution and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salmon Evolution and SalMar ASA
The main advantage of trading using opposite Salmon Evolution and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salmon Evolution position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Salmon Evolution vs. SalMar ASA | Salmon Evolution vs. Lery Seafood Group | Salmon Evolution vs. Pf Bakkafrost | Salmon Evolution vs. Grieg Seafood ASA |
| SalMar ASA vs. Grieg Seafood ASA | SalMar ASA vs. Austevoll Seafood ASA | SalMar ASA vs. Mowi ASA | SalMar ASA vs. Pf Bakkafrost |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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