Correlation Between Grieg Seafood and Lery Seafood

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

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

Diversification Opportunities for Grieg Seafood and Lery Seafood

0.57

Correlation Coefficient

Grieg Seafood  Lery Seafood

Very weak diversification

The 3 months correlation between Grieg and Lery is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and Grieg Seafood 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 Grieg Seafood ASA are associated (or correlated) with Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Lery Seafood go up and down completely randomly.

Pair Corralation between Grieg Seafood and Lery Seafood

Assuming the 90 days trading horizon Grieg Seafood ASA is expected to under-perform the Lery Seafood. In addition to that, Grieg Seafood is 3.12 times more volatile than Lery Seafood Group. It trades about -0.05 of its total potential returns per unit of risk. Lery Seafood Group is currently generating about 0.0 per unit of volatility. If you would invest  4,916  in Lery Seafood Group on December 29, 2024 and sell it today you would lose (20.00) from holding Lery Seafood Group or give up 0.41% of portfolio value over 90 days.

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

Grieg Seafood ASA  vs.  Lery Seafood Group

Grieg Seafood ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grieg Seafood ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Lery Seafood Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lery Seafood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Lery Seafood is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Grieg Seafood and Lery Seafood

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

The idea behind Grieg Seafood ASA and Lery Seafood Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.