Correlation Between Clean Seas and Masoval AS

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

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

Diversification Opportunities for Clean Seas and Masoval AS

-0.61

Correlation Coefficient

Clean Seas  Masoval AS

Excellent diversification

The 3 months correlation between Clean and Masoval is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Masoval AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masoval AS and Clean Seas 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 Clean Seas Seafood 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 Clean Seas i.e., Clean Seas and Masoval AS go up and down completely randomly.

Pair Corralation between Clean Seas and Masoval AS

Assuming the 90 days trading horizon Clean Seas Seafood is expected to generate 2.14 times more return on investment than Masoval AS. However, Clean Seas is 2.14 times more volatile than Masoval AS. It trades about 0.1 of its potential returns per unit of risk. Masoval AS is currently generating about -0.06 per unit of risk. If you would invest  85.00  in Clean Seas Seafood on December 30, 2024 and sell it today you would earn a total of  25.00  from holding Clean Seas Seafood or generate 29.41% return on investment over 90 days.

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

Clean Seas Seafood  vs.  Masoval AS

Clean Seas Seafood

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Seas Seafood are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Clean Seas disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 Clean Seas and Masoval AS

The main advantage of trading using opposite Clean Seas and Masoval AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Seas 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 Clean Seas Seafood 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.