Correlation Between AUSNUTRIA DAIRY and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both AUSNUTRIA DAIRY and Austevoll Seafood 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 AUSNUTRIA DAIRY and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSNUTRIA DAIRY and Austevoll Seafood ASA, you can compare the effects of market volatilities on AUSNUTRIA DAIRY and Austevoll Seafood 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 AUSNUTRIA DAIRY with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSNUTRIA DAIRY and Austevoll Seafood.
Diversification Opportunities for AUSNUTRIA DAIRY and Austevoll Seafood
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUSNUTRIA and Austevoll is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AUSNUTRIA DAIRY and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of AUSNUTRIA DAIRY i.e., AUSNUTRIA DAIRY and Austevoll Seafood go up and down completely randomly.
Pair Corralation between AUSNUTRIA DAIRY and Austevoll Seafood
Assuming the 90 days trading horizon AUSNUTRIA DAIRY is expected to generate 12.05 times less return on investment than Austevoll Seafood. But when comparing it to its historical volatility, AUSNUTRIA DAIRY is 4.14 times less risky than Austevoll Seafood. It trades about 0.03 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 312.00 in Austevoll Seafood ASA on September 9, 2024 and sell it today you would earn a total of 558.00 from holding Austevoll Seafood ASA or generate 178.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AUSNUTRIA DAIRY vs. Austevoll Seafood ASA
Performance |
Timeline |
AUSNUTRIA DAIRY |
Austevoll Seafood ASA |
AUSNUTRIA DAIRY and Austevoll Seafood Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AUSNUTRIA DAIRY and Austevoll Seafood
The main advantage of trading using opposite AUSNUTRIA DAIRY and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSNUTRIA DAIRY position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.AUSNUTRIA DAIRY vs. Jacquet Metal Service | AUSNUTRIA DAIRY vs. Cars Inc | AUSNUTRIA DAIRY vs. Evolution Mining Limited | AUSNUTRIA DAIRY vs. Geely Automobile Holdings |
Austevoll Seafood vs. Vastned Retail NV | Austevoll Seafood vs. AEON STORES | Austevoll Seafood vs. Costco Wholesale Corp | Austevoll Seafood vs. Ross Stores |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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