Correlation Between RomReal and Austevoll Seafood

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

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

Diversification Opportunities for RomReal and Austevoll Seafood

0.0

Correlation Coefficient

RomReal  Austevoll Seafood

Pay attention - limited upside

The 3 months correlation between RomReal and Austevoll is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RomReal Limited 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 RomReal 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 RomReal Limited 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 RomReal i.e., RomReal and Austevoll Seafood go up and down completely randomly.

Pair Corralation between RomReal and Austevoll Seafood

If you would invest  6,826  in Austevoll Seafood ASA on September 30, 2024 and sell it today you would earn a total of  2,929  from holding Austevoll Seafood ASA or generate 42.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.27%
Values	Daily Returns

RomReal Limited  vs.  Austevoll Seafood ASA

RomReal Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Austevoll Seafood ASA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with RomReal and Austevoll Seafood

The main advantage of trading using opposite RomReal and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RomReal 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 RomReal Limited 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.