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
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUSNUTRIA and Austevoll is 0.44. 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 under-perform the Austevoll Seafood. But the stock apears to be less risky and, when comparing its historical volatility, AUSNUTRIA DAIRY is 1.14 times less risky than Austevoll Seafood. The stock trades about -0.05 of its potential returns per unit of risk. The Austevoll Seafood ASA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 724.00 in Austevoll Seafood ASA on September 6, 2024 and sell it today you would earn a total of 127.00 from holding Austevoll Seafood ASA or generate 17.54% 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.The idea behind AUSNUTRIA DAIRY and Austevoll Seafood ASA 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.Austevoll Seafood vs. PENN NATL GAMING | Austevoll Seafood vs. MITSUBISHI STEEL MFG | Austevoll Seafood vs. Media and Games | Austevoll Seafood vs. GameStop Corp |
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.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |