Correlation Between Young Cos and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Austevoll Seafood ASA, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Austevoll Seafood.
Diversification Opportunities for Young Cos and Austevoll Seafood
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Young and Austevoll is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery 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 Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Young Cos and Austevoll Seafood
Assuming the 90 days trading horizon Young Cos Brewery is expected to under-perform the Austevoll Seafood. In addition to that, Young Cos is 1.26 times more volatile than Austevoll Seafood ASA. It trades about -0.03 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.12 per unit of volatility. If you would invest 6,858 in Austevoll Seafood ASA on September 14, 2024 and sell it today you would earn a total of 3,347 from holding Austevoll Seafood ASA or generate 48.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Young Cos Brewery vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Young Cos Brewery |
| Austevoll Seafood ASA |
Young Cos and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Austevoll Seafood
The main advantage of trading using opposite Young Cos and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Berkshire Hathaway | Young Cos vs. Hyundai Motor | Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co |
| Austevoll Seafood vs. The Mercantile Investment | Austevoll Seafood vs. Edita Food Industries | Austevoll Seafood vs. Oakley Capital Investments | Austevoll Seafood vs. Ebro Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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