Correlation Between Lery Seafood and Otovo AS

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

Diversification Opportunities for Lery Seafood and Otovo AS

-0.32

Correlation Coefficient

Lery Seafood  Otovo AS

Very good diversification

The 3 months correlation between Lery and Otovo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Otovo AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otovo AS 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 Otovo AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otovo AS has no effect on the direction of Lery Seafood i.e., Lery Seafood and Otovo AS go up and down completely randomly.

Pair Corralation between Lery Seafood and Otovo AS

Assuming the 90 days trading horizon Lery Seafood is expected to generate 350.24 times less return on investment than Otovo AS. But when comparing it to its historical volatility, Lery Seafood Group is 9.44 times less risky than Otovo AS. It trades about 0.0 of its potential returns per unit of risk. Otovo AS is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Otovo AS on December 29, 2024 and sell it today you would earn a total of  61.00  from holding Otovo AS or generate 67.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Lery Seafood Group  vs.  Otovo AS

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.

Otovo AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Otovo AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Otovo AS displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lery Seafood and Otovo AS

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

The idea behind Lery Seafood Group and Otovo 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.