Correlation Between Grieg Seafood and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Unilever PLC 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 Grieg Seafood and Unilever PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and Unilever PLC, you can compare the effects of market volatilities on Grieg Seafood and Unilever PLC 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 Grieg Seafood with a short position of Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Unilever PLC.
Diversification Opportunities for Grieg Seafood and Unilever PLC
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grieg and Unilever is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC and Grieg 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 Grieg Seafood are associated (or correlated) with Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Unilever PLC go up and down completely randomly.
Pair Corralation between Grieg Seafood and Unilever PLC
Assuming the 90 days trading horizon Grieg Seafood is expected to under-perform the Unilever PLC. In addition to that, Grieg Seafood is 4.11 times more volatile than Unilever PLC. It trades about -0.13 of its total potential returns per unit of risk. Unilever PLC is currently generating about -0.23 per unit of volatility. If you would invest 468,400 in Unilever PLC on September 24, 2024 and sell it today you would lose (12,900) from holding Unilever PLC or give up 2.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grieg Seafood vs. Unilever PLC
Performance |
Timeline |
Grieg Seafood |
Unilever PLC |
Grieg Seafood and Unilever PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grieg Seafood and Unilever PLC
The main advantage of trading using opposite Grieg Seafood and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Unilever PLC 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.Grieg Seafood vs. Blackstone Loan Financing | Grieg Seafood vs. New Residential Investment | Grieg Seafood vs. Global Net Lease | Grieg Seafood vs. Livermore Investments Group |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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