Correlation Between Mowi ASA and Lavoro Limited

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

Diversification Opportunities for Mowi ASA and Lavoro Limited

0.0

Correlation Coefficient

Mowi ASA  Lavoro Limited

Pay attention - limited upside

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

Pair Corralation between Mowi ASA and Lavoro Limited

If you would invest  500.00  in Lavoro Limited Class on December 1, 2024 and sell it today you would lose (6.00) from holding Lavoro Limited Class or give up 1.2% of portfolio value over 90 days.

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

Mowi ASA ADR  vs.  Lavoro Limited Class

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.

Lavoro Limited Class

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lavoro Limited Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Lavoro Limited may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mowi ASA and Lavoro Limited

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

The idea behind Mowi ASA ADR and Lavoro Limited Class 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..