Correlation Between Universal Entertainment and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Universal Entertainment 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 Universal Entertainment and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Entertainment and Austevoll Seafood ASA, you can compare the effects of market volatilities on Universal Entertainment 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 Universal Entertainment with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Entertainment and Austevoll Seafood.
Diversification Opportunities for Universal Entertainment and Austevoll Seafood
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Austevoll is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment i.e., Universal Entertainment and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Universal Entertainment and Austevoll Seafood
Assuming the 90 days trading horizon Universal Entertainment is expected to under-perform the Austevoll Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Universal Entertainment is 2.82 times less risky than Austevoll Seafood. The stock trades about -0.1 of its potential returns per unit of risk. The Austevoll Seafood ASA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 275.00 in Austevoll Seafood ASA on August 26, 2024 and sell it today you would earn a total of 580.00 from holding Austevoll Seafood ASA or generate 210.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Entertainment vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Universal Entertainment |
| Austevoll Seafood ASA |
Universal Entertainment and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Entertainment and Austevoll Seafood
The main advantage of trading using opposite Universal Entertainment and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Entertainment 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.| Universal Entertainment vs. Methode Electronics | Universal Entertainment vs. Richardson Electronics | Universal Entertainment vs. BJs Wholesale Club | Universal Entertainment vs. Benchmark Electronics |
| Austevoll Seafood vs. Superior Plus Corp | Austevoll Seafood vs. NMI Holdings | Austevoll Seafood vs. Origin Agritech | Austevoll Seafood vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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