Correlation Between Mowi ASA and Clean Seas
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Clean Seas 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 Mowi ASA and Clean Seas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Clean Seas Seafood, you can compare the effects of market volatilities on Mowi ASA and Clean Seas 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 Mowi ASA with a short position of Clean Seas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Clean Seas.
Diversification Opportunities for Mowi ASA and Clean Seas
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mowi and Clean is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood and Mowi ASA 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 Mowi ASA are associated (or correlated) with Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Mowi ASA i.e., Mowi ASA and Clean Seas go up and down completely randomly.
Pair Corralation between Mowi ASA and Clean Seas
Assuming the 90 days horizon Mowi ASA is expected to generate 0.16 times more return on investment than Clean Seas. However, Mowi ASA is 6.26 times less risky than Clean Seas. It trades about 0.06 of its potential returns per unit of risk. Clean Seas Seafood is currently generating about -0.13 per unit of risk. If you would invest 1,764 in Mowi ASA on September 26, 2024 and sell it today you would earn a total of 64.00 from holding Mowi ASA or generate 3.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mowi ASA vs. Clean Seas Seafood
Performance |
Timeline |
Mowi ASA |
Clean Seas Seafood |
Mowi ASA and Clean Seas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mowi ASA and Clean Seas
The main advantage of trading using opposite Mowi ASA and Clean Seas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Clean Seas 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 Clean Seas will offset losses from the drop in Clean Seas' long position.Mowi ASA vs. Brasilagro Adr | Mowi ASA vs. Alico Inc | Mowi ASA vs. Edible Garden AG | Mowi ASA vs. Vital Farms |
Clean Seas vs. Brasilagro Adr | Clean Seas vs. Alico Inc | Clean Seas vs. Edible Garden AG | Clean Seas vs. Vital Farms |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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