Correlation Between Warner Music and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Warner Music 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 Warner Music and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Music Group and Austevoll Seafood ASA, you can compare the effects of market volatilities on Warner Music 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 Warner Music with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Music and Austevoll Seafood.
Diversification Opportunities for Warner Music and Austevoll Seafood
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Warner and Austevoll is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Warner Music Group 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 Warner Music 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 Warner Music Group 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 Warner Music i.e., Warner Music and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Warner Music and Austevoll Seafood
Assuming the 90 days horizon Warner Music is expected to generate 15.85 times less return on investment than Austevoll Seafood. But when comparing it to its historical volatility, Warner Music Group is 2.84 times less risky than Austevoll Seafood. It trades about 0.01 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 377.00 in Austevoll Seafood ASA on November 2, 2024 and sell it today you would earn a total of 545.00 from holding Austevoll Seafood ASA or generate 144.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warner Music Group vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Warner Music Group |
| Austevoll Seafood ASA |
Warner Music and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Music and Austevoll Seafood
The main advantage of trading using opposite Warner Music and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Music 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.| Warner Music vs. Universal Health Realty | Warner Music vs. Charter Communications | Warner Music vs. Phibro Animal Health | Warner Music vs. RCI Hospitality Holdings |
| Austevoll Seafood vs. GMO Internet | Austevoll Seafood vs. Spirent Communications plc | Austevoll Seafood vs. Singapore Telecommunications Limited | Austevoll Seafood vs. DXC Technology Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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