Correlation Between Austevoll Seafood and Ingredion Incorporated
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated, you can compare the effects of market volatilities on Austevoll Seafood and Ingredion Incorporated 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 Ingredion Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Ingredion Incorporated.
Diversification Opportunities for Austevoll Seafood and Ingredion Incorporated
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Austevoll and Ingredion is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Ingredion Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingredion Incorporated 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 Ingredion Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingredion Incorporated has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Ingredion Incorporated go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Ingredion Incorporated
Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 1.3 times more return on investment than Ingredion Incorporated. However, Austevoll Seafood is 1.3 times more volatile than Ingredion Incorporated. It trades about 0.02 of its potential returns per unit of risk. Ingredion Incorporated is currently generating about -0.01 per unit of risk. If you would invest 880.00 in Austevoll Seafood ASA on December 12, 2024 and sell it today you would earn a total of 5.00 from holding Austevoll Seafood ASA or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Ingredion Incorporated
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Ingredion Incorporated |
Austevoll Seafood and Ingredion Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Ingredion Incorporated
The main advantage of trading using opposite Austevoll Seafood and Ingredion Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Ingredion Incorporated 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 Ingredion Incorporated will offset losses from the drop in Ingredion Incorporated's long position.| Austevoll Seafood vs. Golden Agri Resources | ||
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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