Correlation Between Mowi ASA and Bunge

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

By analyzing existing cross correlation between Mowi ASA ADR and Bunge Limited, you can compare the effects of market volatilities on Mowi ASA and Bunge 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 Mowi ASA with a short position of Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Bunge.

Diversification Opportunities for Mowi ASA and Bunge

0.0

Correlation Coefficient

Mowi ASA  Bunge

Pay attention - limited upside

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

Pair Corralation between Mowi ASA and Bunge

If you would invest (100.00) in Mowi ASA ADR on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Mowi ASA ADR or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mowi ASA ADR  vs.  Bunge Limited

Mowi ASA ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mowi ASA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Mowi ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bunge Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bunge Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Bunge is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mowi ASA and Bunge

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

The idea behind Mowi ASA ADR and Bunge Limited 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.