Correlation Between SBM OFFSHORE and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE 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 SBM OFFSHORE and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and Austevoll Seafood ASA, you can compare the effects of market volatilities on SBM OFFSHORE 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 SBM OFFSHORE with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and Austevoll Seafood.
Diversification Opportunities for SBM OFFSHORE and Austevoll Seafood
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBM and Austevoll is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE i.e., SBM OFFSHORE and Austevoll Seafood go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and Austevoll Seafood
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 4.22 times less return on investment than Austevoll Seafood. But when comparing it to its historical volatility, SBM OFFSHORE is 3.53 times less risky than Austevoll Seafood. It trades about 0.04 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 341.00 in Austevoll Seafood ASA on August 25, 2024 and sell it today you would earn a total of 497.00 from holding Austevoll Seafood ASA or generate 145.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SBM OFFSHORE vs. Austevoll Seafood ASA
Performance |
| Timeline |
| SBM OFFSHORE |
| Austevoll Seafood ASA |
SBM OFFSHORE and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and Austevoll Seafood
The main advantage of trading using opposite SBM OFFSHORE and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE 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.| SBM OFFSHORE vs. Vulcan Materials | SBM OFFSHORE vs. Goodyear Tire Rubber | SBM OFFSHORE vs. Penn National Gaming | SBM OFFSHORE vs. THRACE PLASTICS |
| Austevoll Seafood vs. Charoen Pokphand Foods | Austevoll Seafood vs. Superior Plus Corp | Austevoll Seafood vs. NMI Holdings | Austevoll Seafood vs. Origin Agritech |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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