Correlation Between National Atomic and Grieg Seafood

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

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

Diversification Opportunities for National Atomic and Grieg Seafood

0.38

Correlation Coefficient

National Atomic  Grieg Seafood

Weak diversification

The 3 months correlation between National and Grieg is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding National Atomic Co and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and National Atomic 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 National Atomic Co are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of National Atomic i.e., National Atomic and Grieg Seafood go up and down completely randomly.

Pair Corralation between National Atomic and Grieg Seafood

Assuming the 90 days trading horizon National Atomic is expected to generate 1.2 times less return on investment than Grieg Seafood. But when comparing it to its historical volatility, National Atomic Co is 1.29 times less risky than Grieg Seafood. It trades about 0.05 of its potential returns per unit of risk. Grieg Seafood is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5,970  in Grieg Seafood on October 8, 2024 and sell it today you would earn a total of  265.00  from holding Grieg Seafood or generate 4.44% return on investment over 90 days.

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

National Atomic Co  vs.  Grieg Seafood

National Atomic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Atomic Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, National Atomic is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Grieg Seafood

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grieg Seafood are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Grieg Seafood is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Atomic and Grieg Seafood

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

The idea behind National Atomic Co and Grieg Seafood 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.