Correlation Between Fevertree Drinks and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks 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 Fevertree Drinks and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks PLC and Austevoll Seafood ASA, you can compare the effects of market volatilities on Fevertree Drinks 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 Fevertree Drinks with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and Austevoll Seafood.
Diversification Opportunities for Fevertree Drinks and Austevoll Seafood
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fevertree and Austevoll is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks i.e., Fevertree Drinks and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Fevertree Drinks and Austevoll Seafood
Assuming the 90 days trading horizon Fevertree Drinks PLC is expected to under-perform the Austevoll Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Fevertree Drinks PLC is 2.34 times less risky than Austevoll Seafood. The stock trades about -0.01 of its potential returns per unit of risk. The Austevoll Seafood ASA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 363.00 in Austevoll Seafood ASA on September 13, 2024 and sell it today you would earn a total of 495.00 from holding Austevoll Seafood ASA or generate 136.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fevertree Drinks PLC vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Fevertree Drinks PLC |
| Austevoll Seafood ASA |
Fevertree Drinks and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and Austevoll Seafood
The main advantage of trading using opposite Fevertree Drinks and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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.| Fevertree Drinks vs. Ming Le Sports | Fevertree Drinks vs. SPORT LISBOA E | Fevertree Drinks vs. MGIC INVESTMENT | Fevertree Drinks vs. Big 5 Sporting |
| Austevoll Seafood vs. Lion One Metals | Austevoll Seafood vs. OFFICE DEPOT | Austevoll Seafood vs. KENEDIX OFFICE INV | Austevoll Seafood vs. Caseys General Stores |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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