Correlation Between Salmon Evolution and Grieg Seafood

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

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

Diversification Opportunities for Salmon Evolution and Grieg Seafood

0.83

Correlation Coefficient

Salmon Evolution  Grieg Seafood

Very poor diversification

The 3 months correlation between Salmon and Grieg is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Salmon Evolution Holding 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 Salmon Evolution 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 Salmon Evolution Holding 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 Salmon Evolution i.e., Salmon Evolution and Grieg Seafood go up and down completely randomly.

Pair Corralation between Salmon Evolution and Grieg Seafood

Assuming the 90 days trading horizon Salmon Evolution Holding is expected to generate 0.36 times more return on investment than Grieg Seafood. However, Salmon Evolution Holding is 2.78 times less risky than Grieg Seafood. It trades about -0.06 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  668.00  in Salmon Evolution Holding on December 30, 2024 and sell it today you would lose (45.00) from holding Salmon Evolution Holding or give up 6.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Salmon Evolution Holding  vs.  Grieg Seafood ASA

Salmon Evolution Holding

Risk-Adjusted Performance

Very Weak

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

Grieg Seafood ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grieg Seafood ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Salmon Evolution and Grieg Seafood

The main advantage of trading using opposite Salmon Evolution and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salmon Evolution 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.

The idea behind Salmon Evolution Holding and Grieg Seafood ASA 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.