Correlation Between Lery Seafood and Odfjell Drilling

Can any of the company-specific risk be diversified away by investing in both Lery Seafood and Odfjell Drilling 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 Lery Seafood and Odfjell Drilling 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 Odfjell Drilling, you can compare the effects of market volatilities on Lery Seafood and Odfjell Drilling 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 Lery Seafood with a short position of Odfjell Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and Odfjell Drilling.

Diversification Opportunities for Lery Seafood and Odfjell Drilling

-0.23

Correlation Coefficient

Lery Seafood  Odfjell Drilling

Very good diversification

The 3 months correlation between Lery and Odfjell is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Odfjell Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell Drilling and Lery 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 Odfjell Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell Drilling has no effect on the direction of Lery Seafood i.e., Lery Seafood and Odfjell Drilling go up and down completely randomly.

Pair Corralation between Lery Seafood and Odfjell Drilling

Assuming the 90 days trading horizon Lery Seafood Group is expected to generate 0.69 times more return on investment than Odfjell Drilling. However, Lery Seafood Group is 1.45 times less risky than Odfjell Drilling. It trades about 0.08 of its potential returns per unit of risk. Odfjell Drilling is currently generating about 0.01 per unit of risk. If you would invest  4,862  in Lery Seafood Group on September 12, 2024 and sell it today you would earn a total of  353.00  from holding Lery Seafood Group or generate 7.26% return on investment over 90 days.

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

Lery Seafood Group  vs.  Odfjell Drilling

Lery Seafood Group

Risk-Adjusted Performance

6 of 100

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 quite conflicting technical and fundamental indicators, Lery Seafood may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Odfjell Drilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Odfjell Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Odfjell Drilling is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lery Seafood and Odfjell Drilling

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

The idea behind Lery Seafood Group and Odfjell Drilling 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.