Correlation Between Nordic Aqua and Andfjord Salmon

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

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

Diversification Opportunities for Nordic Aqua and Andfjord Salmon

0.61

Correlation Coefficient

Nordic Aqua  Andfjord Salmon

Poor diversification

The 3 months correlation between Nordic and Andfjord is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Aqua Partners 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 Nordic Aqua 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 Nordic Aqua Partners 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 Nordic Aqua i.e., Nordic Aqua and Andfjord Salmon go up and down completely randomly.

Pair Corralation between Nordic Aqua and Andfjord Salmon

Assuming the 90 days trading horizon Nordic Aqua Partners is expected to under-perform the Andfjord Salmon. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Aqua Partners is 1.57 times less risky than Andfjord Salmon. The stock trades about -0.04 of its potential returns per unit of risk. The Andfjord Salmon AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,200  in Andfjord Salmon AS on April 24, 2025 and sell it today you would lose (50.00) from holding Andfjord Salmon AS or give up 1.56% of portfolio value over 90 days.

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

Nordic Aqua Partners  vs.  Andfjord Salmon AS

Nordic Aqua Partners

Risk-Adjusted Performance

Very Weak

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

Andfjord Salmon AS

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Nordic Aqua and Andfjord Salmon

The main advantage of trading using opposite Nordic Aqua and Andfjord Salmon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Aqua 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 Nordic Aqua Partners 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.