Correlation Between Austevoll Seafood and JJ SNACK

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Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and JJ SNACK 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 JJ SNACK 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 JJ SNACK FOODS, you can compare the effects of market volatilities on Austevoll Seafood and JJ SNACK 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 JJ SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and JJ SNACK.

Diversification Opportunities for Austevoll Seafood and JJ SNACK

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Austevoll and JJ1 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS 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 JJ SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and JJ SNACK go up and down completely randomly.

Pair Corralation between Austevoll Seafood and JJ SNACK

Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 1.57 times more return on investment than JJ SNACK. However, Austevoll Seafood is 1.57 times more volatile than JJ SNACK FOODS. It trades about 0.22 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.16 per unit of risk. If you would invest  788.00  in Austevoll Seafood ASA on September 7, 2024 and sell it today you would earn a total of  63.00  from holding Austevoll Seafood ASA or generate 7.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Austevoll Seafood ASA  vs.  JJ SNACK FOODS

 Performance 
       Timeline  
Austevoll Seafood ASA 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JJ SNACK FOODS 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in JJ SNACK FOODS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, JJ SNACK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Austevoll Seafood and JJ SNACK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Austevoll Seafood and JJ SNACK

The main advantage of trading using opposite Austevoll Seafood and JJ SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, JJ SNACK 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 JJ SNACK will offset losses from the drop in JJ SNACK's long position.
The idea behind Austevoll Seafood ASA and JJ SNACK FOODS 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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