Correlation Between Beowulf Mining and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Beowulf Mining and Austevoll Seafood 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 Beowulf Mining and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beowulf Mining and Austevoll Seafood ASA, you can compare the effects of market volatilities on Beowulf Mining and Austevoll Seafood 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 Beowulf Mining with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beowulf Mining and Austevoll Seafood.
Diversification Opportunities for Beowulf Mining and Austevoll Seafood
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beowulf and Austevoll is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and Beowulf Mining 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 Beowulf Mining are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of Beowulf Mining i.e., Beowulf Mining and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Beowulf Mining and Austevoll Seafood
Assuming the 90 days trading horizon Beowulf Mining is expected to under-perform the Austevoll Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Beowulf Mining is 1.84 times less risky than Austevoll Seafood. The stock trades about -0.31 of its potential returns per unit of risk. The Austevoll Seafood ASA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,770 in Austevoll Seafood ASA on August 31, 2024 and sell it today you would earn a total of 330.00 from holding Austevoll Seafood ASA or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beowulf Mining vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Beowulf Mining |
| Austevoll Seafood ASA |
Beowulf Mining and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beowulf Mining and Austevoll Seafood
The main advantage of trading using opposite Beowulf Mining and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beowulf Mining position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.The idea behind Beowulf Mining and Austevoll Seafood ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Austevoll Seafood vs. Beowulf Mining | Austevoll Seafood vs. Silvercorp Metals | Austevoll Seafood vs. Gamma Communications PLC | Austevoll Seafood vs. Aeorema Communications Plc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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