Correlation Between Grieg Seafood and Systemair

Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Systemair 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 Grieg Seafood and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grieg Seafood and Systemair AB, you can compare the effects of market volatilities on Grieg Seafood and Systemair 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 Grieg Seafood with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Systemair.

Diversification Opportunities for Grieg Seafood and Systemair

-0.41

Correlation Coefficient

Grieg Seafood  Systemair

Very good diversification

The 3 months correlation between Grieg and Systemair is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Grieg 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 Grieg Seafood are associated (or correlated) with Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Systemair go up and down completely randomly.

Pair Corralation between Grieg Seafood and Systemair

Assuming the 90 days trading horizon Grieg Seafood is expected to generate 11.08 times less return on investment than Systemair. In addition to that, Grieg Seafood is 1.04 times more volatile than Systemair AB. It trades about 0.0 of its total potential returns per unit of risk. Systemair AB is currently generating about 0.02 per unit of volatility. If you would invest  7,752  in Systemair AB on October 26, 2024 and sell it today you would earn a total of  648.00  from holding Systemair AB or generate 8.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Grieg Seafood  vs.  Systemair AB

Grieg Seafood

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grieg Seafood has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Grieg Seafood is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Systemair AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Systemair AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Systemair is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Grieg Seafood and Systemair

The main advantage of trading using opposite Grieg Seafood and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.

The idea behind Grieg Seafood and Systemair AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.