Correlation Between Retail Estates and AUSTEVOLL SEAFOOD
Can any of the company-specific risk be diversified away by investing in both Retail Estates 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 Retail Estates and AUSTEVOLL SEAFOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and AUSTEVOLL SEAFOOD, you can compare the effects of market volatilities on Retail Estates 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 Retail Estates with a short position of AUSTEVOLL SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and AUSTEVOLL SEAFOOD.
Diversification Opportunities for Retail Estates and AUSTEVOLL SEAFOOD
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Retail and AUSTEVOLL is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD and Retail Estates 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 Retail Estates NV 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 has no effect on the direction of Retail Estates i.e., Retail Estates and AUSTEVOLL SEAFOOD go up and down completely randomly.
Pair Corralation between Retail Estates and AUSTEVOLL SEAFOOD
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the AUSTEVOLL SEAFOOD. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 1.64 times less risky than AUSTEVOLL SEAFOOD. The stock trades about -0.26 of its potential returns per unit of risk. The AUSTEVOLL SEAFOOD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 794.00 in AUSTEVOLL SEAFOOD on August 28, 2024 and sell it today you would earn a total of 57.00 from holding AUSTEVOLL SEAFOOD or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. AUSTEVOLL SEAFOOD
Performance |
| Timeline |
| Retail Estates NV |
| AUSTEVOLL SEAFOOD |
Retail Estates and AUSTEVOLL SEAFOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and AUSTEVOLL SEAFOOD
The main advantage of trading using opposite Retail Estates and AUSTEVOLL SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates 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.| Retail Estates vs. GAMING FAC SA | Retail Estates vs. Media and Games | Retail Estates vs. EAST SIDE GAMES | Retail Estates vs. CI GAMES SA |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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