Correlation Between Lery Seafood and Salmon Evolution

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

Diversification Opportunities for Lery Seafood and Salmon Evolution

-0.34

Correlation Coefficient

Lery Seafood  Salmon Evolution

Very good diversification

The 3 months correlation between Lery and Salmon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Salmon Evolution Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salmon Evolution Holding 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 Salmon Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salmon Evolution Holding has no effect on the direction of Lery Seafood i.e., Lery Seafood and Salmon Evolution go up and down completely randomly.

Pair Corralation between Lery Seafood and Salmon Evolution

Assuming the 90 days trading horizon Lery Seafood Group is expected to generate 0.9 times more return on investment than Salmon Evolution. However, Lery Seafood Group is 1.11 times less risky than Salmon Evolution. It trades about 0.07 of its potential returns per unit of risk. Salmon Evolution Holding is currently generating about 0.03 per unit of risk. If you would invest  4,862  in Lery Seafood Group on September 12, 2024 and sell it today you would earn a total of  278.00  from holding Lery Seafood Group or generate 5.72% return on investment over 90 days.

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

Lery Seafood Group  vs.  Salmon Evolution Holding

Lery Seafood Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lery Seafood Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

Salmon Evolution Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salmon Evolution Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Salmon Evolution is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lery Seafood and Salmon Evolution

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

The idea behind Lery Seafood Group and Salmon Evolution Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.