Correlation Between Lery Seafood and Nordic Aqua

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

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

Diversification Opportunities for Lery Seafood and Nordic Aqua

0.0

Correlation Coefficient

Lery Seafood  Nordic Aqua

Pay attention - limited upside

The 3 months correlation between Lery and Nordic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Nordic Aqua Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Aqua Partners and Lery 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 Lery Seafood Group are associated (or correlated) with Nordic Aqua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Aqua Partners has no effect on the direction of Lery Seafood i.e., Lery Seafood and Nordic Aqua go up and down completely randomly.

Pair Corralation between Lery Seafood and Nordic Aqua

Assuming the 90 days trading horizon Lery Seafood Group is expected to under-perform the Nordic Aqua. But the stock apears to be less risky and, when comparing its historical volatility, Lery Seafood Group is 1.11 times less risky than Nordic Aqua. The stock trades about 0.0 of its potential returns per unit of risk. The Nordic Aqua Partners is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7,400  in Nordic Aqua Partners on October 20, 2024 and sell it today you would earn a total of  100.00  from holding Nordic Aqua Partners or generate 1.35% return on investment over 90 days.

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

Lery Seafood Group  vs.  Nordic Aqua Partners

Lery Seafood Group

Risk-Adjusted Performance

0 of 100

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.

Nordic Aqua Partners

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Aqua Partners are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Nordic Aqua 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 Lery Seafood and Nordic Aqua

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

The idea behind Lery Seafood Group and Nordic Aqua Partners 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..