Correlation Between Austevoll Seafood and Quadrise Plc

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

Diversification Opportunities for Austevoll Seafood and Quadrise Plc

-0.53

Correlation Coefficient

Austevoll Seafood  Quadrise Plc

Excellent diversification

The 3 months correlation between Austevoll and Quadrise is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Quadrise Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadrise 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 Quadrise Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadrise Plc has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Quadrise Plc go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Quadrise Plc

Assuming the 90 days trading horizon Austevoll Seafood is expected to generate 6.06 times less return on investment than Quadrise Plc. But when comparing it to its historical volatility, Austevoll Seafood ASA is 5.81 times less risky than Quadrise Plc. It trades about 0.06 of its potential returns per unit of risk. Quadrise Plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  356.00  in Quadrise Plc on December 3, 2024 and sell it today you would earn a total of  34.00  from holding Quadrise Plc or generate 9.55% 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.  Quadrise Plc

Austevoll Seafood ASA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 4 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Quadrise Plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Quadrise Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Quadrise Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Austevoll Seafood and Quadrise Plc

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

The idea behind Austevoll Seafood ASA and Quadrise Plc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.