Correlation Between CVW CLEANTECH and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH 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 CVW CLEANTECH and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and Austevoll Seafood ASA, you can compare the effects of market volatilities on CVW CLEANTECH 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 CVW CLEANTECH with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Austevoll Seafood.
Diversification Opportunities for CVW CLEANTECH and Austevoll Seafood
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVW and Austevoll is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC 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 CVW CLEANTECH 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 CVW CLEANTECH INC 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 CVW CLEANTECH i.e., CVW CLEANTECH and Austevoll Seafood go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Austevoll Seafood
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to generate 0.93 times more return on investment than Austevoll Seafood. However, CVW CLEANTECH INC is 1.08 times less risky than Austevoll Seafood. It trades about 0.2 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.18 per unit of risk. If you would invest 52.00 in CVW CLEANTECH INC on September 1, 2024 and sell it today you would earn a total of 4.00 from holding CVW CLEANTECH INC or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. Austevoll Seafood ASA
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Austevoll Seafood ASA |
CVW CLEANTECH and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Austevoll Seafood
The main advantage of trading using opposite CVW CLEANTECH and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH 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.| CVW CLEANTECH vs. Monster Beverage Corp | CVW CLEANTECH vs. Granite Construction | CVW CLEANTECH vs. Suntory Beverage Food | CVW CLEANTECH vs. United Breweries Co |
| Austevoll Seafood vs. GRIFFIN MINING LTD | Austevoll Seafood vs. PennantPark Investment | Austevoll Seafood vs. Jacquet Metal Service | Austevoll Seafood vs. Apollo Investment Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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