Correlation Between Broadwind and AUSTEVOLL SEAFOOD

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

By analyzing existing cross correlation between Broadwind and AUSTEVOLL SEAFOOD, you can compare the effects of market volatilities on Broadwind 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 Broadwind with a short position of AUSTEVOLL SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadwind and AUSTEVOLL SEAFOOD.

Diversification Opportunities for Broadwind and AUSTEVOLL SEAFOOD

0.0

Correlation Coefficient

Broadwind  AUSTEVOLL SEAFOOD

Pay attention - limited upside

The 3 months correlation between Broadwind and AUSTEVOLL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD and Broadwind 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 Broadwind 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 has no effect on the direction of Broadwind i.e., Broadwind and AUSTEVOLL SEAFOOD go up and down completely randomly.

Pair Corralation between Broadwind and AUSTEVOLL SEAFOOD

If you would invest  166.00  in Broadwind on October 22, 2024 and sell it today you would earn a total of  25.00  from holding Broadwind or generate 15.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

Broadwind  vs.  AUSTEVOLL SEAFOOD

Broadwind

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Broadwind are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Broadwind may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AUSTEVOLL SEAFOOD

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days AUSTEVOLL SEAFOOD 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Broadwind and AUSTEVOLL SEAFOOD

The main advantage of trading using opposite Broadwind and AUSTEVOLL SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind 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 Broadwind and AUSTEVOLL SEAFOOD 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.