Correlation Between Austevoll Seafood and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Grong Sparebank 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 Grong Sparebank 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 Grong Sparebank, you can compare the effects of market volatilities on Austevoll Seafood and Grong Sparebank 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 Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Grong Sparebank.
Diversification Opportunities for Austevoll Seafood and Grong Sparebank
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Austevoll and Grong is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank 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 Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Grong Sparebank go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Grong Sparebank
Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 1.12 times more return on investment than Grong Sparebank. However, Austevoll Seafood is 1.12 times more volatile than Grong Sparebank. It trades about 0.09 of its potential returns per unit of risk. Grong Sparebank is currently generating about 0.02 per unit of risk. If you would invest 9,370 in Austevoll Seafood ASA on August 29, 2024 and sell it today you would earn a total of 630.00 from holding Austevoll Seafood ASA or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Grong Sparebank
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Grong Sparebank |
Austevoll Seafood and Grong Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Grong Sparebank
The main advantage of trading using opposite Austevoll Seafood and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Grong Sparebank 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.| Austevoll Seafood vs. Lery Seafood Group | Austevoll Seafood vs. Grieg Seafood ASA | Austevoll Seafood vs. SalMar ASA | Austevoll Seafood vs. Pf Bakkafrost |
| Grong Sparebank vs. DnB ASA | Grong Sparebank vs. Sparebank 1 SR | Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebanken Mre |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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