Correlation Between Austevoll Seafood and UMC Electronics
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and UMC Electronics 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 UMC Electronics 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 UMC Electronics Co, you can compare the effects of market volatilities on Austevoll Seafood and UMC Electronics 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 UMC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and UMC Electronics.
Diversification Opportunities for Austevoll Seafood and UMC Electronics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Austevoll and UMC is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and UMC Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMC Electronics 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 UMC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMC Electronics has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and UMC Electronics go up and down completely randomly.
Pair Corralation between Austevoll Seafood and UMC Electronics
Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 0.88 times more return on investment than UMC Electronics. However, Austevoll Seafood ASA is 1.13 times less risky than UMC Electronics. It trades about 0.15 of its potential returns per unit of risk. UMC Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 807.00 in Austevoll Seafood ASA on September 1, 2024 and sell it today you would earn a total of 48.00 from holding Austevoll Seafood ASA or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. UMC Electronics Co
Performance |
| Timeline |
| Austevoll Seafood ASA |
| UMC Electronics |
Austevoll Seafood and UMC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and UMC Electronics
The main advantage of trading using opposite Austevoll Seafood and UMC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, UMC Electronics 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 UMC Electronics will offset losses from the drop in UMC Electronics' long position.| Austevoll Seafood vs. GRIFFIN MINING LTD | Austevoll Seafood vs. PennantPark Investment | Austevoll Seafood vs. Jacquet Metal Service | Austevoll Seafood vs. Apollo Investment Corp |
| UMC Electronics vs. Perdoceo Education | UMC Electronics vs. IDP EDUCATION LTD | UMC Electronics vs. Boiron SA | UMC Electronics vs. Khiron Life Sciences |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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