Correlation Between SalMar ASA and Limoneira
Can any of the company-specific risk be diversified away by investing in both SalMar ASA and Limoneira 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 SalMar ASA and Limoneira into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SalMar ASA and Limoneira Co, you can compare the effects of market volatilities on SalMar ASA and Limoneira 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 SalMar ASA with a short position of Limoneira. Check out your portfolio center. Please also check ongoing floating volatility patterns of SalMar ASA and Limoneira.
Diversification Opportunities for SalMar ASA and Limoneira
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SalMar and Limoneira is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SalMar ASA and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and SalMar 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 SalMar ASA are associated (or correlated) with Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of SalMar ASA i.e., SalMar ASA and Limoneira go up and down completely randomly.
Pair Corralation between SalMar ASA and Limoneira
Assuming the 90 days horizon SalMar ASA is expected to generate 1.55 times more return on investment than Limoneira. However, SalMar ASA is 1.55 times more volatile than Limoneira Co. It trades about 0.01 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.14 per unit of risk. If you would invest 1,285 in SalMar ASA on October 20, 2024 and sell it today you would lose (18.00) from holding SalMar ASA or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SalMar ASA vs. Limoneira Co
Performance |
| Timeline |
| SalMar ASA |
| Limoneira |
SalMar ASA and Limoneira Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SalMar ASA and Limoneira
The main advantage of trading using opposite SalMar ASA and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SalMar ASA position performs unexpectedly, Limoneira 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 Limoneira will offset losses from the drop in Limoneira's long position.| SalMar ASA vs. SLC Agricola SA | SalMar ASA vs. Cal Maine Foods | SalMar ASA vs. Bunge Limited | SalMar ASA vs. Austevoll Seafood ASA |
| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |