Correlation Between RomReal and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both RomReal and Grieg Seafood 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 RomReal and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RomReal Limited and Grieg Seafood ASA, you can compare the effects of market volatilities on RomReal and Grieg Seafood 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 RomReal with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of RomReal and Grieg Seafood.
Diversification Opportunities for RomReal and Grieg Seafood
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RomReal and Grieg is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding RomReal Limited and Grieg Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood ASA and RomReal 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 RomReal Limited are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood ASA has no effect on the direction of RomReal i.e., RomReal and Grieg Seafood go up and down completely randomly.
Pair Corralation between RomReal and Grieg Seafood
Assuming the 90 days trading horizon RomReal Limited is expected to generate 1.33 times more return on investment than Grieg Seafood. However, RomReal is 1.33 times more volatile than Grieg Seafood ASA. It trades about 0.04 of its potential returns per unit of risk. Grieg Seafood ASA is currently generating about -0.05 per unit of risk. If you would invest 256.00 in RomReal Limited on December 29, 2024 and sell it today you would earn a total of 6.00 from holding RomReal Limited or generate 2.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
RomReal Limited vs. Grieg Seafood ASA
Performance |
Timeline |
RomReal Limited |
Grieg Seafood ASA |
RomReal and Grieg Seafood Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RomReal and Grieg Seafood
The main advantage of trading using opposite RomReal and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RomReal position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.RomReal vs. Aasen Sparebank | RomReal vs. Nordic Mining ASA | RomReal vs. 5Th Planet Games | RomReal vs. Nordhealth AS |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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