Correlation Between Grieg Seafood and Orkla ASA

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

Diversification Opportunities for Grieg Seafood and Orkla ASA

-0.54

Correlation Coefficient

Grieg Seafood  Orkla ASA

Excellent diversification

The 3 months correlation between Grieg and Orkla is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Orkla ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orkla ASA 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 Orkla ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orkla ASA has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Orkla ASA go up and down completely randomly.

Pair Corralation between Grieg Seafood and Orkla ASA

Assuming the 90 days trading horizon Grieg Seafood ASA is expected to under-perform the Orkla ASA. In addition to that, Grieg Seafood is 3.98 times more volatile than Orkla ASA. It trades about -0.05 of its total potential returns per unit of risk. Orkla ASA is currently generating about 0.2 per unit of volatility. If you would invest  9,835  in Orkla ASA on December 29, 2024 and sell it today you would earn a total of  1,495  from holding Orkla ASA or generate 15.2% return on investment over 90 days.

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

Grieg Seafood ASA  vs.  Orkla ASA

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.

Orkla ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orkla ASA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Orkla ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grieg Seafood and Orkla ASA

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

The idea behind Grieg Seafood ASA and Orkla ASA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.