Correlation Between Austevoll Seafood and Alstria Office

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

Diversification Opportunities for Austevoll Seafood and Alstria Office

0.01

Correlation Coefficient

Austevoll Seafood  Alstria Office

Significant diversification

The 3 months correlation between Austevoll and Alstria is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Alstria Office go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Alstria Office

Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 0.15 times more return on investment than Alstria Office. However, Austevoll Seafood ASA is 6.58 times less risky than Alstria Office. It trades about -0.13 of its potential returns per unit of risk. alstria office REIT AG is currently generating about -0.17 per unit of risk. If you would invest  10,100  in Austevoll Seafood ASA on October 5, 2024 and sell it today you would lose (302.00) from holding Austevoll Seafood ASA or give up 2.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Austevoll Seafood ASA  vs.  alstria office REIT AG

Austevoll Seafood ASA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Austevoll Seafood is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

alstria office REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days alstria office REIT AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Alstria Office is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Austevoll Seafood and Alstria Office

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

The idea behind Austevoll Seafood ASA and alstria office REIT AG 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.