Correlation Between BW Offshore and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both BW Offshore 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 BW Offshore and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Austevoll Seafood ASA, you can compare the effects of market volatilities on BW Offshore 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 BW Offshore with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Austevoll Seafood.
Diversification Opportunities for BW Offshore and Austevoll Seafood
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0RKH and Austevoll is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore 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 BW Offshore 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 BW Offshore 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 BW Offshore i.e., BW Offshore and Austevoll Seafood go up and down completely randomly.
Pair Corralation between BW Offshore and Austevoll Seafood
Assuming the 90 days trading horizon BW Offshore is expected to under-perform the Austevoll Seafood. In addition to that, BW Offshore is 1.32 times more volatile than Austevoll Seafood ASA. It trades about 0.0 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.28 per unit of volatility. If you would invest 9,725 in Austevoll Seafood ASA on November 7, 2024 and sell it today you would earn a total of 940.00 from holding Austevoll Seafood ASA or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
BW Offshore vs. Austevoll Seafood ASA
Performance |
| Timeline |
| BW Offshore |
| Austevoll Seafood ASA |
BW Offshore and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Austevoll Seafood
The main advantage of trading using opposite BW Offshore and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore 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.| BW Offshore vs. Vitec Software Group | BW Offshore vs. Allianz Technology Trust | BW Offshore vs. Auction Technology Group | BW Offshore vs. DXC Technology Co |
| Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Toyota Motor Corp | Austevoll Seafood vs. Reliance Industries Ltd |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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