Correlation Between Proximar Seafood and Schibsted ASA

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

By analyzing existing cross correlation between Proximar Seafood AS and Schibsted ASA B, you can compare the effects of market volatilities on Proximar Seafood and Schibsted ASA 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 Proximar Seafood with a short position of Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proximar Seafood and Schibsted ASA.

Diversification Opportunities for Proximar Seafood and Schibsted ASA

0.78

Correlation Coefficient

Proximar Seafood  Schibsted ASA

Poor diversification

The 3 months correlation between Proximar and Schibsted is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Proximar Seafood AS and Schibsted ASA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA B and Proximar 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 Proximar Seafood AS are associated (or correlated) with Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA B has no effect on the direction of Proximar Seafood i.e., Proximar Seafood and Schibsted ASA go up and down completely randomly.

Pair Corralation between Proximar Seafood and Schibsted ASA

Assuming the 90 days trading horizon Proximar Seafood AS is expected to generate 1.65 times more return on investment than Schibsted ASA. However, Proximar Seafood is 1.65 times more volatile than Schibsted ASA B. It trades about -0.01 of its potential returns per unit of risk. Schibsted ASA B is currently generating about -0.12 per unit of risk. If you would invest  355.00  in Proximar Seafood AS on December 25, 2024 and sell it today you would lose (12.00) from holding Proximar Seafood AS or give up 3.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Proximar Seafood AS  vs.  Schibsted ASA B

Proximar Seafood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proximar Seafood AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Proximar Seafood is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Schibsted ASA B

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schibsted ASA B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Proximar Seafood and Schibsted ASA

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

The idea behind Proximar Seafood AS and Schibsted ASA B 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.