Correlation Between Austevoll Seafood and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and NorAm Drilling 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 NorAm Drilling 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 NorAm Drilling AS, you can compare the effects of market volatilities on Austevoll Seafood and NorAm Drilling 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 NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and NorAm Drilling.
Diversification Opportunities for Austevoll Seafood and NorAm Drilling
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Austevoll and NorAm is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS 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 NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and NorAm Drilling go up and down completely randomly.
Pair Corralation between Austevoll Seafood and NorAm Drilling
Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 1.26 times more return on investment than NorAm Drilling. However, Austevoll Seafood is 1.26 times more volatile than NorAm Drilling AS. It trades about 0.05 of its potential returns per unit of risk. NorAm Drilling AS is currently generating about -0.21 per unit of risk. If you would invest 9,955 in Austevoll Seafood ASA on August 25, 2024 and sell it today you would earn a total of 135.00 from holding Austevoll Seafood ASA or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. NorAm Drilling AS
Performance |
| Timeline |
| Austevoll Seafood ASA |
| NorAm Drilling AS |
Austevoll Seafood and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and NorAm Drilling
The main advantage of trading using opposite Austevoll Seafood and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| Austevoll Seafood vs. Grieg Seafood ASA | Austevoll Seafood vs. SalMar ASA | Austevoll Seafood vs. Pf Bakkafrost | 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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