Correlation Between Pf Bakkafrost and Andfjord Salmon
Can any of the company-specific risk be diversified away by investing in both Pf Bakkafrost and Andfjord Salmon 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 Andfjord Salmon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pf Bakkafrost and Andfjord Salmon AS, you can compare the effects of market volatilities on Pf Bakkafrost and Andfjord Salmon 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 Andfjord Salmon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pf Bakkafrost and Andfjord Salmon.
Diversification Opportunities for Pf Bakkafrost and Andfjord Salmon
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BAKKA and Andfjord is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pf Bakkafrost and Andfjord Salmon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andfjord Salmon AS 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 Andfjord Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andfjord Salmon AS has no effect on the direction of Pf Bakkafrost i.e., Pf Bakkafrost and Andfjord Salmon go up and down completely randomly.
Pair Corralation between Pf Bakkafrost and Andfjord Salmon
Assuming the 90 days trading horizon Pf Bakkafrost is expected to generate 1.66 times less return on investment than Andfjord Salmon. But when comparing it to its historical volatility, Pf Bakkafrost is 1.31 times less risky than Andfjord Salmon. It trades about 0.17 of its potential returns per unit of risk. Andfjord Salmon AS is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,070 in Andfjord Salmon AS on September 14, 2024 and sell it today you would earn a total of 950.00 from holding Andfjord Salmon AS or generate 30.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Pf Bakkafrost vs. Andfjord Salmon AS
Performance |
Timeline |
Pf Bakkafrost |
Andfjord Salmon AS |
Pf Bakkafrost and Andfjord Salmon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pf Bakkafrost and Andfjord Salmon
The main advantage of trading using opposite Pf Bakkafrost and Andfjord Salmon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pf Bakkafrost position performs unexpectedly, Andfjord Salmon 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 Andfjord Salmon will offset losses from the drop in Andfjord Salmon's long position.Pf Bakkafrost vs. SalMar ASA | ||
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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