Correlation Between Austevoll Seafood and InterContinental
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and InterContinental 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 InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on Austevoll Seafood and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and InterContinental.
Diversification Opportunities for Austevoll Seafood and InterContinental
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Austevoll and InterContinental is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and InterContinental go up and down completely randomly.
Pair Corralation between Austevoll Seafood and InterContinental
Assuming the 90 days trading horizon Austevoll Seafood is expected to generate 46.28 times less return on investment than InterContinental. But when comparing it to its historical volatility, Austevoll Seafood ASA is 1.06 times less risky than InterContinental. It trades about 0.01 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 848,000 in InterContinental Hotels Group on September 12, 2024 and sell it today you would earn a total of 127,800 from holding InterContinental Hotels Group or generate 15.07% 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. InterContinental Hotels Group
Performance |
| Timeline |
| Austevoll Seafood ASA |
| InterContinental Hotels |
Austevoll Seafood and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and InterContinental
The main advantage of trading using opposite Austevoll Seafood and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Austevoll Seafood vs. Hong Kong Land | Austevoll Seafood vs. Neometals | Austevoll Seafood vs. Coor Service Management | Austevoll Seafood vs. Fidelity Sustainable USD |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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