Correlation Between Lerøy Seafood and WI LAN
Can any of the company-specific risk be diversified away by investing in both Lerøy Seafood and WI LAN 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 Lerøy Seafood and WI LAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lery Seafood Group and WI LAN, you can compare the effects of market volatilities on Lerøy Seafood and WI LAN 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 Lerøy Seafood with a short position of WI LAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lerøy Seafood and WI LAN.
Diversification Opportunities for Lerøy Seafood and WI LAN
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lerøy and WJL is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and WI LAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WI LAN and Lerøy Seafood 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 Lery Seafood Group are associated (or correlated) with WI LAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WI LAN has no effect on the direction of Lerøy Seafood i.e., Lerøy Seafood and WI LAN go up and down completely randomly.
Pair Corralation between Lerøy Seafood and WI LAN
Assuming the 90 days horizon Lerøy Seafood is expected to generate 1.28 times less return on investment than WI LAN. But when comparing it to its historical volatility, Lery Seafood Group is 1.87 times less risky than WI LAN. It trades about 0.29 of its potential returns per unit of risk. WI LAN is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 102.00 in WI LAN on September 15, 2024 and sell it today you would earn a total of 14.00 from holding WI LAN or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lery Seafood Group vs. WI LAN
Performance |
| Timeline |
| Lery Seafood Group |
| WI LAN |
Lerøy Seafood and WI LAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lerøy Seafood and WI LAN
The main advantage of trading using opposite Lerøy Seafood and WI LAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lerøy Seafood position performs unexpectedly, WI LAN 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 WI LAN will offset losses from the drop in WI LAN's long position.| Lerøy Seafood vs. Hormel Foods | Lerøy Seafood vs. Superior Plus Corp | Lerøy Seafood vs. SIVERS SEMICONDUCTORS AB | Lerøy Seafood vs. NorAm Drilling AS |
| WI LAN vs. USWE SPORTS AB | WI LAN vs. Astral Foods Limited | WI LAN vs. Playa Hotels Resorts | WI LAN 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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