Correlation Between Vastned Retail and Austevoll Seafood

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Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Austevoll Seafood 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 Vastned Retail and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Austevoll Seafood ASA, you can compare the effects of market volatilities on Vastned Retail and Austevoll Seafood 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 Vastned Retail with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Austevoll Seafood.

Diversification Opportunities for Vastned Retail and Austevoll Seafood

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between Vastned and Austevoll is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of Vastned Retail i.e., Vastned Retail and Austevoll Seafood go up and down completely randomly.

Pair Corralation between Vastned Retail and Austevoll Seafood

Assuming the 90 days trading horizon Vastned Retail is expected to generate 1.26 times less return on investment than Austevoll Seafood. But when comparing it to its historical volatility, Vastned Retail NV is 1.2 times less risky than Austevoll Seafood. It trades about 0.07 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,574  in Austevoll Seafood ASA on October 9, 2024 and sell it today you would earn a total of  1,984  from holding Austevoll Seafood ASA or generate 26.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.8%
ValuesDaily Returns

Vastned Retail NV  vs.  Austevoll Seafood ASA

 Performance 
       Timeline  
Vastned Retail NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vastned Retail is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Austevoll Seafood ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Austevoll Seafood ASA has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Vastned Retail and Austevoll Seafood Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vastned Retail and Austevoll Seafood

The main advantage of trading using opposite Vastned Retail and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.
The idea behind Vastned Retail NV and Austevoll Seafood ASA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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