Correlation Between TRAVEL + and Lerøy Seafood

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

By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and Lery Seafood Group, you can compare the effects of market volatilities on TRAVEL + and Lerøy 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 TRAVEL + with a short position of Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and Lerøy Seafood.

Diversification Opportunities for TRAVEL + and Lerøy Seafood

0.73

Correlation Coefficient

TRAVEL +  Lerøy Seafood

Poor diversification

The 3 months correlation between TRAVEL and Lerøy is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and TRAVEL + 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 TRAVEL LEISURE DL 01 are associated (or correlated) with Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of TRAVEL + i.e., TRAVEL + and Lerøy Seafood go up and down completely randomly.

Pair Corralation between TRAVEL + and Lerøy Seafood

Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to under-perform the Lerøy Seafood. In addition to that, TRAVEL + is 1.12 times more volatile than Lery Seafood Group. It trades about -0.1 of its total potential returns per unit of risk. Lery Seafood Group is currently generating about 0.08 per unit of volatility. If you would invest  404.00  in Lery Seafood Group on December 20, 2024 and sell it today you would earn a total of  31.00  from holding Lery Seafood Group or generate 7.67% return on investment over 90 days.

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

TRAVEL LEISURE DL 01  vs.  Lery Seafood Group

TRAVEL LEISURE DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRAVEL LEISURE DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Lery Seafood Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lery Seafood Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lerøy Seafood may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TRAVEL + and Lerøy Seafood

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

The idea behind TRAVEL LEISURE DL 01 and Lery Seafood Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.