Correlation Between Austevoll Seafood and Griffon
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Griffon 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 Austevoll Seafood and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austevoll Seafood ASA and Griffon, you can compare the effects of market volatilities on Austevoll Seafood and Griffon 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 Austevoll Seafood with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Griffon.
Diversification Opportunities for Austevoll Seafood and Griffon
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Austevoll and Griffon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Austevoll Seafood 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 Austevoll Seafood ASA are associated (or correlated) with Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Griffon go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Griffon
Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 1.69 times more return on investment than Griffon. However, Austevoll Seafood is 1.69 times more volatile than Griffon. It trades about -0.14 of its potential returns per unit of risk. Griffon is currently generating about -0.48 per unit of risk. If you would invest 864.00 in Austevoll Seafood ASA on September 28, 2024 and sell it today you would lose (59.00) from holding Austevoll Seafood ASA or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Griffon
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Griffon |
Austevoll Seafood and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Griffon
The main advantage of trading using opposite Austevoll Seafood and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| Austevoll Seafood vs. Archer Daniels Midland | Austevoll Seafood vs. Tyson Foods | Austevoll Seafood vs. MOWI ASA SPADR | Austevoll Seafood vs. Mowi ASA |
| Griffon vs. Honeywell International | Griffon vs. Mitsubishi | Griffon vs. CITIC Limited | Griffon vs. CITIC LTD ADR5 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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