Correlation Between SalMar ASA and Brasilagro Adr
Can any of the company-specific risk be diversified away by investing in both SalMar ASA and Brasilagro Adr 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 Brasilagro Adr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SalMar ASA and Brasilagro Adr, you can compare the effects of market volatilities on SalMar ASA and Brasilagro Adr 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 Brasilagro Adr. Check out your portfolio center. Please also check ongoing floating volatility patterns of SalMar ASA and Brasilagro Adr.
Diversification Opportunities for SalMar ASA and Brasilagro Adr
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SalMar and Brasilagro is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SalMar ASA and Brasilagro Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brasilagro Adr 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 Brasilagro Adr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brasilagro Adr has no effect on the direction of SalMar ASA i.e., SalMar ASA and Brasilagro Adr go up and down completely randomly.
Pair Corralation between SalMar ASA and Brasilagro Adr
Assuming the 90 days horizon SalMar ASA is expected to generate 1.23 times more return on investment than Brasilagro Adr. However, SalMar ASA is 1.23 times more volatile than Brasilagro Adr. It trades about 0.06 of its potential returns per unit of risk. Brasilagro Adr is currently generating about 0.01 per unit of risk. If you would invest 768.00 in SalMar ASA on August 27, 2024 and sell it today you would earn a total of 564.00 from holding SalMar ASA or generate 73.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SalMar ASA vs. Brasilagro Adr
Performance |
| Timeline |
| SalMar ASA |
| Brasilagro Adr |
SalMar ASA and Brasilagro Adr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SalMar ASA and Brasilagro Adr
The main advantage of trading using opposite SalMar ASA and Brasilagro Adr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SalMar ASA position performs unexpectedly, Brasilagro Adr 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 Brasilagro Adr will offset losses from the drop in Brasilagro Adr'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 |
| Brasilagro Adr vs. Austevoll Seafood ASA | Brasilagro Adr vs. Golden Agri Resources | Brasilagro Adr vs. SalMar ASA | Brasilagro Adr vs. Wilmar International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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