Correlation Between Pf Bakkafrost and Arctic Fish

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

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

Diversification Opportunities for Pf Bakkafrost and Arctic Fish

0.56

Correlation Coefficient

Pf Bakkafrost  Arctic Fish

Very weak diversification

The 3 months correlation between BAKKA and Arctic is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pf Bakkafrost and Arctic Fish Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Fish Holding and Pf Bakkafrost 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 Pf Bakkafrost are associated (or correlated) with Arctic Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Fish Holding has no effect on the direction of Pf Bakkafrost i.e., Pf Bakkafrost and Arctic Fish go up and down completely randomly.

Pair Corralation between Pf Bakkafrost and Arctic Fish

Assuming the 90 days trading horizon Pf Bakkafrost is expected to under-perform the Arctic Fish. But the stock apears to be less risky and, when comparing its historical volatility, Pf Bakkafrost is 2.16 times less risky than Arctic Fish. The stock trades about -0.26 of its potential returns per unit of risk. The Arctic Fish Holding is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  6,950  in Arctic Fish Holding on December 30, 2024 and sell it today you would lose (850.00) from holding Arctic Fish Holding or give up 12.23% of portfolio value over 90 days.

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

Pf Bakkafrost  vs.  Arctic Fish Holding

Pf Bakkafrost

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pf Bakkafrost has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.

Pair Trading with Pf Bakkafrost and Arctic Fish

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

The idea behind Pf Bakkafrost and Arctic Fish Holding 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.