Correlation Between AUSNUTRIA DAIRY and Lerøy Seafood

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

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

Diversification Opportunities for AUSNUTRIA DAIRY and Lerøy Seafood

0.26

Correlation Coefficient

AUSNUTRIA DAIRY  Lerøy Seafood

Modest diversification

The 3 months correlation between AUSNUTRIA and Lerøy is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AUSNUTRIA DAIRY and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY are associated (or correlated) with Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of AUSNUTRIA DAIRY i.e., AUSNUTRIA DAIRY and Lerøy Seafood go up and down completely randomly.

Pair Corralation between AUSNUTRIA DAIRY and Lerøy Seafood

Assuming the 90 days trading horizon AUSNUTRIA DAIRY is expected to under-perform the Lerøy Seafood. But the stock apears to be less risky and, when comparing its historical volatility, AUSNUTRIA DAIRY is 3.76 times less risky than Lerøy Seafood. The stock trades about -0.03 of its potential returns per unit of risk. The Lery Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  93.00  in Lery Seafood Group on October 1, 2024 and sell it today you would earn a total of  313.00  from holding Lery Seafood Group or generate 336.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AUSNUTRIA DAIRY  vs.  Lery Seafood Group

AUSNUTRIA DAIRY

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AUSNUTRIA DAIRY are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, AUSNUTRIA DAIRY may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lery Seafood Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lery Seafood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lerøy Seafood is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AUSNUTRIA DAIRY and Lerøy Seafood

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

The idea behind AUSNUTRIA DAIRY and Lery Seafood Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.