Correlation Between Tekna Holding and Grieg Seafood

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

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

Diversification Opportunities for Tekna Holding and Grieg Seafood

0.27

Correlation Coefficient

Tekna Holding  Grieg Seafood

Modest diversification

The 3 months correlation between Tekna and Grieg is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tekna Holding AS 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 Tekna Holding 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 Tekna Holding AS 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 Tekna Holding i.e., Tekna Holding and Grieg Seafood go up and down completely randomly.

Pair Corralation between Tekna Holding and Grieg Seafood

Assuming the 90 days trading horizon Tekna Holding AS is expected to generate 3.22 times more return on investment than Grieg Seafood. However, Tekna Holding is 3.22 times more volatile than Grieg Seafood ASA. It trades about 0.57 of its potential returns per unit of risk. Grieg Seafood ASA is currently generating about 0.12 per unit of risk. If you would invest  347.00  in Tekna Holding AS on October 23, 2024 and sell it today you would earn a total of  303.00  from holding Tekna Holding AS or generate 87.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

Tekna Holding AS  vs.  Grieg Seafood ASA

Tekna Holding AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tekna Holding AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Tekna Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Grieg Seafood ASA

Risk-Adjusted Performance

0 of 100

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 quite persistent technical and fundamental indicators, Grieg Seafood is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Tekna Holding and Grieg Seafood

The main advantage of trading using opposite Tekna Holding and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekna Holding 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 Tekna Holding AS 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 Stocks Directory module to find actively traded stocks across global markets.