Correlation Between Austevoll Seafood and Diageo Plc
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Diageo Plc 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 Diageo Plc 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 Diageo plc, you can compare the effects of market volatilities on Austevoll Seafood and Diageo Plc 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 Diageo Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Diageo Plc.
Diversification Opportunities for Austevoll Seafood and Diageo Plc
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Austevoll and Diageo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Diageo plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diageo plc 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 Diageo Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diageo plc has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Diageo Plc go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Diageo Plc
Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 4.09 times more return on investment than Diageo Plc. However, Austevoll Seafood is 4.09 times more volatile than Diageo plc. It trades about 0.05 of its potential returns per unit of risk. Diageo plc is currently generating about -0.05 per unit of risk. If you would invest 326.00 in Austevoll Seafood ASA on November 30, 2024 and sell it today you would earn a total of 579.00 from holding Austevoll Seafood ASA or generate 177.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Diageo plc
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Diageo plc |
Austevoll Seafood and Diageo Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Diageo Plc
The main advantage of trading using opposite Austevoll Seafood and Diageo Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Diageo Plc 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 Diageo Plc will offset losses from the drop in Diageo Plc's long position.| Austevoll Seafood vs. Platinum Investment Management | Austevoll Seafood vs. Mobilezone Holding AG | Austevoll Seafood vs. Cleanaway Waste Management | Austevoll Seafood vs. FIH MOBILE |
| Diageo Plc vs. RCI Hospitality Holdings | Diageo Plc vs. FARO TECHNOLOGIES | Diageo Plc vs. PURETECH HEALTH PLC | Diageo Plc vs. CARDINAL HEALTH |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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