Correlation Between Golden Agri and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Golden Agri 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 Golden Agri and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Agri Resources and Austevoll Seafood ASA, you can compare the effects of market volatilities on Golden Agri 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 Golden Agri with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri and Austevoll Seafood.
Diversification Opportunities for Golden Agri and Austevoll Seafood
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Austevoll is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources 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 Golden Agri 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 Golden Agri Resources 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 Golden Agri i.e., Golden Agri and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Golden Agri and Austevoll Seafood
Assuming the 90 days horizon Golden Agri Resources is expected to generate 1.71 times more return on investment than Austevoll Seafood. However, Golden Agri is 1.71 times more volatile than Austevoll Seafood ASA. It trades about 0.02 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.01 per unit of risk. If you would invest 2,111 in Golden Agri Resources on August 24, 2024 and sell it today you would earn a total of 19.00 from holding Golden Agri Resources or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.74% |
| Values | Daily Returns |
Golden Agri Resources vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Golden Agri Resources |
| Austevoll Seafood ASA |
Golden Agri and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri and Austevoll Seafood
The main advantage of trading using opposite Golden Agri and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri 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.| Golden Agri vs. Avi Ltd ADR | Golden Agri vs. Altavoz Entertainment | Golden Agri vs. The a2 Milk | Golden Agri vs. Aryzta AG PK |
| Austevoll Seafood vs. Avi Ltd ADR | Austevoll Seafood vs. Altavoz Entertainment | Austevoll Seafood vs. The a2 Milk | Austevoll Seafood vs. Aryzta AG PK |
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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