Correlation Between Lerøy Seafood and ITV -

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

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

Diversification Opportunities for Lerøy Seafood and ITV -

0.2

Correlation Coefficient

Lerøy Seafood  ITV -

Modest diversification

The 3 months correlation between Lerøy and ITV is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and ITV Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV Dusseldorf and Lerøy 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 Lery Seafood Group are associated (or correlated) with ITV -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV Dusseldorf has no effect on the direction of Lerøy Seafood i.e., Lerøy Seafood and ITV - go up and down completely randomly.

Pair Corralation between Lerøy Seafood and ITV -

Assuming the 90 days horizon Lerøy Seafood is expected to generate 2.78 times less return on investment than ITV -. But when comparing it to its historical volatility, Lery Seafood Group is 1.1 times less risky than ITV -. It trades about 0.04 of its potential returns per unit of risk. ITV Dusseldorf is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  86.00  in ITV Dusseldorf on December 19, 2024 and sell it today you would earn a total of  8.00  from holding ITV Dusseldorf or generate 9.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Lery Seafood Group  vs.  ITV Dusseldorf

Lery Seafood Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lery Seafood Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Lerøy Seafood is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ITV Dusseldorf

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ITV Dusseldorf are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ITV - may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lerøy Seafood and ITV -

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

The idea behind Lery Seafood Group and ITV Dusseldorf 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.