Correlation Between Austevoll Seafood and State Bank

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

Diversification Opportunities for Austevoll Seafood and State Bank

-0.19

Correlation Coefficient

Austevoll Seafood  State Bank

Good diversification

The 3 months correlation between Austevoll and State is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and State Bank go up and down completely randomly.

Pair Corralation between Austevoll Seafood and State Bank

Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 0.79 times more return on investment than State Bank. However, Austevoll Seafood ASA is 1.27 times less risky than State Bank. It trades about 0.13 of its potential returns per unit of risk. State Bank of is currently generating about -0.08 per unit of risk. If you would invest  9,760  in Austevoll Seafood ASA on October 27, 2024 and sell it today you would earn a total of  985.00  from holding Austevoll Seafood ASA or generate 10.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Austevoll Seafood ASA  vs.  State Bank of

Austevoll Seafood ASA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 10 (%) 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.

State Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days State Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Austevoll Seafood and State Bank

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

The idea behind Austevoll Seafood ASA and State Bank of 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.