Correlation Between Arctic Fish and Arctic Bioscience

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

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

Diversification Opportunities for Arctic Fish and Arctic Bioscience

0.13

Correlation Coefficient

Arctic Fish  Arctic Bioscience

Average diversification

The 3 months correlation between Arctic and Arctic is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Fish Holding and Arctic Bioscience AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Bioscience and Arctic Fish 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 Arctic Fish Holding are associated (or correlated) with Arctic Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Bioscience has no effect on the direction of Arctic Fish i.e., Arctic Fish and Arctic Bioscience go up and down completely randomly.

Pair Corralation between Arctic Fish and Arctic Bioscience

Assuming the 90 days trading horizon Arctic Fish Holding is expected to under-perform the Arctic Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, Arctic Fish Holding is 1.81 times less risky than Arctic Bioscience. The stock trades about -0.09 of its potential returns per unit of risk. The Arctic Bioscience AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  450.00  in Arctic Bioscience AS on April 25, 2025 and sell it today you would lose (71.00) from holding Arctic Bioscience AS or give up 15.78% of portfolio value over 90 days.

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

Arctic Fish Holding  vs.  Arctic Bioscience AS

Arctic Fish Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arctic Fish Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Arctic Bioscience

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Arctic Fish and Arctic Bioscience

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

The idea behind Arctic Fish Holding and Arctic Bioscience 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.