Correlation Between Austevoll Seafood and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Nordic Mining 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 Nordic Mining 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 Nordic Mining ASA, you can compare the effects of market volatilities on Austevoll Seafood and Nordic Mining 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 Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Nordic Mining.
Diversification Opportunities for Austevoll Seafood and Nordic Mining
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Austevoll and Nordic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Nordic Mining ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Mining ASA 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 Nordic Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Mining ASA has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Nordic Mining go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Nordic Mining
Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 0.66 times more return on investment than Nordic Mining. However, Austevoll Seafood ASA is 1.51 times less risky than Nordic Mining. It trades about 0.21 of its potential returns per unit of risk. Nordic Mining ASA is currently generating about -0.03 per unit of risk. If you would invest 9,540 in Austevoll Seafood ASA on September 1, 2024 and sell it today you would earn a total of 590.00 from holding Austevoll Seafood ASA or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Nordic Mining ASA
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Nordic Mining ASA |
Austevoll Seafood and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Nordic Mining
The main advantage of trading using opposite Austevoll Seafood and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Nordic Mining 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 Nordic Mining will offset losses from the drop in Nordic Mining's long position.| Austevoll Seafood vs. Grieg Seafood ASA | Austevoll Seafood vs. SalMar ASA | Austevoll Seafood vs. Mowi ASA |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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