Correlation Between Austevoll Seafood and VeriSign

Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and VeriSign 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 VeriSign 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 VeriSign, you can compare the effects of market volatilities on Austevoll Seafood and VeriSign 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 VeriSign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and VeriSign.

Diversification Opportunities for Austevoll Seafood and VeriSign

0.25

Correlation Coefficient

Austevoll Seafood  VeriSign

Modest diversification

The 3 months correlation between Austevoll and VeriSign is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and VeriSign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VeriSign 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 VeriSign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VeriSign has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and VeriSign go up and down completely randomly.

Pair Corralation between Austevoll Seafood and VeriSign

Assuming the 90 days trading horizon Austevoll Seafood is expected to generate 2.18 times less return on investment than VeriSign. But when comparing it to its historical volatility, Austevoll Seafood ASA is 1.13 times less risky than VeriSign. It trades about 0.08 of its potential returns per unit of risk. VeriSign is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  18,315  in VeriSign on October 25, 2024 and sell it today you would earn a total of  2,479  from holding VeriSign or generate 13.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Austevoll Seafood ASA  vs.  VeriSign

Austevoll Seafood ASA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in February 2025.

VeriSign

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VeriSign are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VeriSign unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Austevoll Seafood and VeriSign

The main advantage of trading using opposite Austevoll Seafood and VeriSign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, VeriSign 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 VeriSign will offset losses from the drop in VeriSign's long position.

The idea behind Austevoll Seafood ASA and VeriSign pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.