Correlation Between Austevoll Seafood and Archer

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

By analyzing existing cross correlation between Austevoll Seafood ASA and Archer Limited, you can compare the effects of market volatilities on Austevoll Seafood and Archer 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 Austevoll Seafood with a short position of Archer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Archer.

Diversification Opportunities for Austevoll Seafood and Archer

-0.42

Correlation Coefficient

Austevoll Seafood  Archer

Very good diversification

The 3 months correlation between Austevoll and Archer is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Archer Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Limited and Austevoll Seafood 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 Austevoll Seafood ASA are associated (or correlated) with Archer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Limited has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Archer go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Archer

Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 0.63 times more return on investment than Archer. However, Austevoll Seafood ASA is 1.59 times less risky than Archer. It trades about 0.0 of its potential returns per unit of risk. Archer Limited is currently generating about -0.01 per unit of risk. If you would invest  9,710  in Austevoll Seafood ASA on September 23, 2024 and sell it today you would lose (65.00) from holding Austevoll Seafood ASA or give up 0.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Austevoll Seafood ASA  vs.  Archer Limited

Austevoll Seafood ASA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Archer Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Archer Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Archer 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 Austevoll Seafood and Archer

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

The idea behind Austevoll Seafood ASA and Archer Limited 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.