Correlation Between Mowi ASA and Nutrien

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

Diversification Opportunities for Mowi ASA and Nutrien

0.0

Correlation Coefficient

Mowi ASA  Nutrien

Pay attention - limited upside

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

Pair Corralation between Mowi ASA and Nutrien

If you would invest  4,364  in Nutrien on December 28, 2024 and sell it today you would earn a total of  726.00  from holding Nutrien or generate 16.64% 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.  Nutrien

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.

Nutrien

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Nutrien reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mowi ASA and Nutrien

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

The idea behind Mowi ASA ADR and Nutrien 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.