Correlation Between Spirent Communications and Austevoll Seafood

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Can any of the company-specific risk be diversified away by investing in both Spirent Communications 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 Spirent Communications and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and Austevoll Seafood ASA, you can compare the effects of market volatilities on Spirent Communications 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 Spirent Communications with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and Austevoll Seafood.

Diversification Opportunities for Spirent Communications and Austevoll Seafood

SpirentAustevollDiversified AwaySpirentAustevollDiversified Away100%
0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Spirent and Austevoll is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc 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 Spirent Communications 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 Spirent Communications plc 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 Spirent Communications i.e., Spirent Communications and Austevoll Seafood go up and down completely randomly.

Pair Corralation between Spirent Communications and Austevoll Seafood

Assuming the 90 days horizon Spirent Communications plc is expected to generate 0.77 times more return on investment than Austevoll Seafood. However, Spirent Communications plc is 1.29 times less risky than Austevoll Seafood. It trades about 0.16 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.03 per unit of risk. If you would invest  206.00  in Spirent Communications plc on November 30, 2024 and sell it today you would earn a total of  10.00  from holding Spirent Communications plc or generate 4.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Spirent Communications plc  vs.  Austevoll Seafood ASA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.15BW8 Z85
       Timeline  
Spirent Communications 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Spirent Communications plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Spirent Communications may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22.052.12.152.2
Austevoll Seafood ASA 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb88.599.5

Spirent Communications and Austevoll Seafood Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.33-5.49-3.65-1.810.03071.853.735.617.49 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15BW8 Z85
       Returns  

Pair Trading with Spirent Communications and Austevoll Seafood

The main advantage of trading using opposite Spirent Communications and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications 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 Spirent Communications plc 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.
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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