Correlation Between Austevoll Seafood and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and MGIC INVESTMENT 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 MGIC INVESTMENT 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 MGIC INVESTMENT, you can compare the effects of market volatilities on Austevoll Seafood and MGIC INVESTMENT 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 MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and MGIC INVESTMENT.
Diversification Opportunities for Austevoll Seafood and MGIC INVESTMENT
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Austevoll and MGIC is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT 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 MGIC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC INVESTMENT has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Austevoll Seafood and MGIC INVESTMENT
Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 5.3 times more return on investment than MGIC INVESTMENT. However, Austevoll Seafood is 5.3 times more volatile than MGIC INVESTMENT. It trades about 0.06 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.13 per unit of risk. If you would invest 304.00 in Austevoll Seafood ASA on August 31, 2024 and sell it today you would earn a total of 562.00 from holding Austevoll Seafood ASA or generate 184.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. MGIC INVESTMENT
Performance |
| Timeline |
| Austevoll Seafood ASA |
| MGIC INVESTMENT |
Austevoll Seafood and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and MGIC INVESTMENT
The main advantage of trading using opposite Austevoll Seafood and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, MGIC INVESTMENT 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 MGIC INVESTMENT will offset losses from the drop in MGIC INVESTMENT's long position.| Austevoll Seafood vs. SalMar ASA | Austevoll Seafood vs. Superior Plus Corp | Austevoll Seafood vs. NMI Holdings | Austevoll Seafood vs. Origin Agritech |
| MGIC INVESTMENT vs. SIVERS SEMICONDUCTORS AB | MGIC INVESTMENT vs. Darden Restaurants | MGIC INVESTMENT vs. Reliance Steel Aluminum | MGIC INVESTMENT vs. Q2M Managementberatung AG |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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