Correlation Between Austevoll Seafood and Walmart

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

Diversification Opportunities for Austevoll Seafood and Walmart

0.6

Correlation Coefficient

Austevoll Seafood  Walmart

Poor diversification

The 3 months correlation between Austevoll and Walmart is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Walmart go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Walmart

Assuming the 90 days horizon Austevoll Seafood is expected to generate 2.06 times less return on investment than Walmart. In addition to that, Austevoll Seafood is 1.4 times more volatile than Walmart. It trades about 0.11 of its total potential returns per unit of risk. Walmart is currently generating about 0.32 per unit of volatility. If you would invest  6,967  in Walmart on September 4, 2024 and sell it today you would earn a total of  1,841  from holding Walmart or generate 26.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Austevoll Seafood ASA  vs.  Walmart

Austevoll Seafood ASA

Risk-Adjusted Performance

8 of 100

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 uncertain basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Walmart

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Walmart reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Austevoll Seafood and Walmart

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

The idea behind Austevoll Seafood ASA and Walmart 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.