Correlation Between Pf Bakkafrost and Nordic Halibut

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Can any of the company-specific risk be diversified away by investing in both Pf Bakkafrost and Nordic Halibut 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 Nordic Halibut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pf Bakkafrost and Nordic Halibut AS, you can compare the effects of market volatilities on Pf Bakkafrost and Nordic Halibut 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 Nordic Halibut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pf Bakkafrost and Nordic Halibut.

Diversification Opportunities for Pf Bakkafrost and Nordic Halibut

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between BAKKA and Nordic is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pf Bakkafrost and Nordic Halibut AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Halibut 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 Nordic Halibut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Halibut AS has no effect on the direction of Pf Bakkafrost i.e., Pf Bakkafrost and Nordic Halibut go up and down completely randomly.

Pair Corralation between Pf Bakkafrost and Nordic Halibut

Assuming the 90 days trading horizon Pf Bakkafrost is expected to generate 0.55 times more return on investment than Nordic Halibut. However, Pf Bakkafrost is 1.81 times less risky than Nordic Halibut. It trades about -0.04 of its potential returns per unit of risk. Nordic Halibut AS is currently generating about -0.15 per unit of risk. If you would invest  64,350  in Pf Bakkafrost on October 22, 2024 and sell it today you would lose (2,850) from holding Pf Bakkafrost or give up 4.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.36%
ValuesDaily Returns

Pf Bakkafrost  vs.  Nordic Halibut AS

 Performance 
       Timeline  
Pf Bakkafrost 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 very healthy basic indicators, Pf Bakkafrost is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Nordic Halibut AS 

Risk-Adjusted Performance

0 of 100

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

Pf Bakkafrost and Nordic Halibut Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pf Bakkafrost and Nordic Halibut

The main advantage of trading using opposite Pf Bakkafrost and Nordic Halibut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pf Bakkafrost position performs unexpectedly, Nordic Halibut 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 Nordic Halibut will offset losses from the drop in Nordic Halibut's long position.
The idea behind Pf Bakkafrost and Nordic Halibut 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.
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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