Correlation Between Arctic Fish and Masoval AS

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

By analyzing existing cross correlation between Arctic Fish Holding and Masoval AS, you can compare the effects of market volatilities on Arctic Fish and Masoval AS 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 Arctic Fish with a short position of Masoval AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Fish and Masoval AS.

Diversification Opportunities for Arctic Fish and Masoval AS

0.12

Correlation Coefficient

Arctic Fish  Masoval AS

Average diversification

The 3 months correlation between Arctic and Masoval is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Fish Holding and Masoval AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masoval AS and Arctic Fish 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 Arctic Fish Holding are associated (or correlated) with Masoval AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masoval AS has no effect on the direction of Arctic Fish i.e., Arctic Fish and Masoval AS go up and down completely randomly.

Pair Corralation between Arctic Fish and Masoval AS

Assuming the 90 days trading horizon Arctic Fish Holding is expected to under-perform the Masoval AS. In addition to that, Arctic Fish is 1.56 times more volatile than Masoval AS. It trades about -0.06 of its total potential returns per unit of risk. Masoval AS is currently generating about -0.06 per unit of volatility. If you would invest  2,760  in Masoval AS on December 1, 2024 and sell it today you would lose (220.00) from holding Masoval AS or give up 7.97% of portfolio value over 90 days.

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

Arctic Fish Holding  vs.  Masoval AS

Arctic Fish Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arctic Fish Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Masoval AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Masoval AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Arctic Fish and Masoval AS

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

The idea behind Arctic Fish Holding and Masoval AS 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.