Correlation Between Austevoll Seafood and Sparebanken Ost
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Sparebanken Ost 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 Sparebanken Ost 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 Sparebanken Ost, you can compare the effects of market volatilities on Austevoll Seafood and Sparebanken Ost 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 Sparebanken Ost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Sparebanken Ost.
Diversification Opportunities for Austevoll Seafood and Sparebanken Ost
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Austevoll and Sparebanken is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost 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 Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Sparebanken Ost go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Sparebanken Ost
Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 0.81 times more return on investment than Sparebanken Ost. However, Austevoll Seafood ASA is 1.24 times less risky than Sparebanken Ost. It trades about 0.11 of its potential returns per unit of risk. Sparebanken Ost is currently generating about 0.08 per unit of risk. If you would invest 7,637 in Austevoll Seafood ASA on September 1, 2024 and sell it today you would earn a total of 2,493 from holding Austevoll Seafood ASA or generate 32.64% 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. Sparebanken Ost
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Sparebanken Ost |
Austevoll Seafood and Sparebanken Ost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Sparebanken Ost
The main advantage of trading using opposite Austevoll Seafood and Sparebanken Ost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Sparebanken Ost 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 Sparebanken Ost will offset losses from the drop in Sparebanken Ost's long position.| Austevoll Seafood vs. Grieg Seafood ASA | Austevoll Seafood vs. SalMar ASA | Austevoll Seafood vs. Mowi ASA |
| Sparebanken Ost vs. Shelf Drilling | Sparebanken Ost vs. Odfjell Drilling | Sparebanken Ost vs. Nordic Semiconductor ASA | Sparebanken Ost vs. Lery Seafood Group |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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