Correlation Between Nordic Aqua and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Nordic Aqua 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 Nordic Aqua and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Aqua Partners and Austevoll Seafood ASA, you can compare the effects of market volatilities on Nordic Aqua 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 Nordic Aqua with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Aqua and Austevoll Seafood.
Diversification Opportunities for Nordic Aqua and Austevoll Seafood
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Austevoll is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Aqua Partners 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 Nordic Aqua 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 Nordic Aqua Partners 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 Nordic Aqua i.e., Nordic Aqua and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Nordic Aqua and Austevoll Seafood
Assuming the 90 days trading horizon Nordic Aqua is expected to generate 2.26 times less return on investment than Austevoll Seafood. In addition to that, Nordic Aqua is 1.83 times more volatile than Austevoll Seafood ASA. It trades about 0.02 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.09 per unit of volatility. If you would invest 7,168 in Austevoll Seafood ASA on September 1, 2024 and sell it today you would earn a total of 2,962 from holding Austevoll Seafood ASA or generate 41.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Nordic Aqua Partners vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Nordic Aqua Partners |
| Austevoll Seafood ASA |
Nordic Aqua and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Aqua and Austevoll Seafood
The main advantage of trading using opposite Nordic Aqua and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Aqua 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.| Nordic Aqua vs. Andfjord Salmon AS | Nordic Aqua vs. Elkem ASA | Nordic Aqua vs. Integrated Wind Solutions | Nordic Aqua vs. Vow ASA |
| Austevoll Seafood vs. Grieg Seafood ASA | Austevoll Seafood vs. SalMar ASA | Austevoll Seafood vs. Mowi ASA |
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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