Correlation Between Mowi ASA and Kellogg
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Kellogg 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 Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Kellogg Company, you can compare the effects of market volatilities on Mowi ASA and Kellogg 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 Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Kellogg.
Diversification Opportunities for Mowi ASA and Kellogg
Very poor diversification
The 3 months correlation between Mowi and Kellogg is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Kellogg Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg Company 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 Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellogg Company has no effect on the direction of Mowi ASA i.e., Mowi ASA and Kellogg go up and down completely randomly.
Pair Corralation between Mowi ASA and Kellogg
Assuming the 90 days horizon Mowi ASA is expected to generate 4.31 times more return on investment than Kellogg. However, Mowi ASA is 4.31 times more volatile than Kellogg Company. It trades about 0.09 of its potential returns per unit of risk. Kellogg Company is currently generating about 0.18 per unit of risk. If you would invest 1,511 in Mowi ASA on September 25, 2024 and sell it today you would earn a total of 133.00 from holding Mowi ASA or generate 8.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 97.67% |
Values | Daily Returns |
Mowi ASA vs. Kellogg Company
Performance |
Timeline |
Mowi ASA |
Kellogg Company |
Mowi ASA and Kellogg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mowi ASA and Kellogg
The main advantage of trading using opposite Mowi ASA and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Kellogg 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 Kellogg will offset losses from the drop in Kellogg's long position.Mowi ASA vs. Archer Daniels Midland | Mowi ASA vs. Tyson Foods | Mowi ASA vs. Wilmar International Limited | Mowi ASA vs. MOWI ASA SPADR |
Kellogg vs. Mowi ASA | Kellogg vs. LEROY SEAFOOD GRUNSPADR | Kellogg vs. Lery Seafood Group | Kellogg vs. Nisshin Seifun Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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