Correlation Between Masoval AS and Andfjord Salmon

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

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

Diversification Opportunities for Masoval AS and Andfjord Salmon

-0.78

Correlation Coefficient

Masoval AS  Andfjord Salmon

Pay attention - limited upside

The 3 months correlation between Masoval and Andfjord is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Masoval AS and Andfjord Salmon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andfjord Salmon AS and Masoval AS 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 Masoval AS are associated (or correlated) with Andfjord Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andfjord Salmon AS has no effect on the direction of Masoval AS i.e., Masoval AS and Andfjord Salmon go up and down completely randomly.

Pair Corralation between Masoval AS and Andfjord Salmon

Assuming the 90 days trading horizon Masoval AS is expected to under-perform the Andfjord Salmon. But the stock apears to be less risky and, when comparing its historical volatility, Masoval AS is 1.13 times less risky than Andfjord Salmon. The stock trades about -0.07 of its potential returns per unit of risk. The Andfjord Salmon AS is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,110  in Andfjord Salmon AS on September 26, 2024 and sell it today you would earn a total of  990.00  from holding Andfjord Salmon AS or generate 31.83% return on investment over 90 days.

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

Masoval AS  vs.  Andfjord Salmon AS

Masoval AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Masoval AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Andfjord Salmon AS

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Andfjord Salmon AS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Andfjord Salmon disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Masoval AS and Andfjord Salmon

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

The idea behind Masoval AS and Andfjord Salmon AS 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.