Correlation Between VIRGIN WINES and Austevoll Seafood

Can any of the company-specific risk be diversified away by investing in both VIRGIN WINES 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 VIRGIN WINES and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIRGIN WINES UK and Austevoll Seafood ASA, you can compare the effects of market volatilities on VIRGIN WINES 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 VIRGIN WINES with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRGIN WINES and Austevoll Seafood.

Diversification Opportunities for VIRGIN WINES and Austevoll Seafood

-0.17

Correlation Coefficient

VIRGIN WINES  Austevoll Seafood

Good diversification

The 3 months correlation between VIRGIN and Austevoll is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding VIRGIN WINES UK 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 VIRGIN WINES 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 VIRGIN WINES UK 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 VIRGIN WINES i.e., VIRGIN WINES and Austevoll Seafood go up and down completely randomly.

Pair Corralation between VIRGIN WINES and Austevoll Seafood

Assuming the 90 days horizon VIRGIN WINES UK is expected to under-perform the Austevoll Seafood. In addition to that, VIRGIN WINES is 3.64 times more volatile than Austevoll Seafood ASA. It trades about -0.1 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.08 per unit of volatility. If you would invest  805.00  in Austevoll Seafood ASA on December 23, 2024 and sell it today you would earn a total of  81.00  from holding Austevoll Seafood ASA or generate 10.06% return on investment over 90 days.

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

VIRGIN WINES UK  vs.  Austevoll Seafood ASA

VIRGIN WINES UK

Risk-Adjusted Performance

Very Weak

Over the last 90 days VIRGIN WINES UK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with VIRGIN WINES and Austevoll Seafood

The main advantage of trading using opposite VIRGIN WINES and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRGIN WINES 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 VIRGIN WINES UK 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.