Correlation Between Grieg Seafood and Nordic Halibut

Can any of the company-specific risk be diversified away by investing in both Grieg Seafood 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 Grieg Seafood and Nordic Halibut 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 Nordic Halibut AS, you can compare the effects of market volatilities on Grieg Seafood 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 Grieg Seafood with a short position of Nordic Halibut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Nordic Halibut.

Diversification Opportunities for Grieg Seafood and Nordic Halibut

0.09

Correlation Coefficient

Grieg Seafood  Nordic Halibut

Significant diversification

The 3 months correlation between Grieg and Nordic is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA 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 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 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 Grieg Seafood i.e., Grieg Seafood and Nordic Halibut go up and down completely randomly.

Pair Corralation between Grieg Seafood and Nordic Halibut

Assuming the 90 days trading horizon Grieg Seafood ASA is expected to generate 2.24 times more return on investment than Nordic Halibut. However, Grieg Seafood is 2.24 times more volatile than Nordic Halibut AS. It trades about 0.01 of its potential returns per unit of risk. Nordic Halibut AS is currently generating about -0.05 per unit of risk. If you would invest  6,000  in Grieg Seafood ASA on December 23, 2024 and sell it today you would lose (225.00) from holding Grieg Seafood ASA or give up 3.75% of portfolio value over 90 days.

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

Grieg Seafood ASA  vs.  Nordic Halibut AS

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 quite persistent technical and fundamental indicators, Grieg Seafood is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Nordic Halibut AS

Risk-Adjusted Performance

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 latest conflicting 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 Grieg Seafood and Nordic Halibut

The main advantage of trading using opposite Grieg Seafood and Nordic Halibut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood 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 Grieg Seafood ASA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.