Correlation Between Austevoll Seafood and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Automatic Data 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 Automatic Data 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 Automatic Data Processing, you can compare the effects of market volatilities on Austevoll Seafood and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Automatic Data.
Diversification Opportunities for Austevoll Seafood and Automatic Data
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Austevoll and Automatic is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Automatic Data go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Automatic Data
Assuming the 90 days trading horizon Austevoll Seafood is expected to generate 1.47 times less return on investment than Automatic Data. In addition to that, Austevoll Seafood is 1.04 times more volatile than Automatic Data Processing. It trades about 0.14 of its total potential returns per unit of risk. Automatic Data Processing is currently generating about 0.21 per unit of volatility. If you would invest 28,664 in Automatic Data Processing on August 28, 2024 and sell it today you would earn a total of 1,720 from holding Automatic Data Processing or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Automatic Data Processing
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Automatic Data Processing |
Austevoll Seafood and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Automatic Data
The main advantage of trading using opposite Austevoll Seafood and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Hyundai Motor | Austevoll Seafood vs. Toyota Motor Corp |
| Automatic Data vs. Samsung Electronics Co | Automatic Data vs. Samsung Electronics Co | Automatic Data vs. Hyundai Motor | Automatic Data vs. Toyota Motor 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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