Correlation Between Austevoll Seafood and Wilmar International

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

Diversification Opportunities for Austevoll Seafood and Wilmar International

0.82

Correlation Coefficient

Austevoll Seafood  Wilmar International

Very poor diversification

The 3 months correlation between Austevoll and Wilmar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Wilmar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Wilmar International go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Wilmar International

Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 0.73 times more return on investment than Wilmar International. However, Austevoll Seafood ASA is 1.37 times less risky than Wilmar International. It trades about 0.15 of its potential returns per unit of risk. Wilmar International is currently generating about 0.09 per unit of risk. If you would invest  880.00  in Austevoll Seafood ASA on December 4, 2024 and sell it today you would earn a total of  85.00  from holding Austevoll Seafood ASA or generate 9.66% return on investment over 90 days.

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

Austevoll Seafood ASA  vs.  Wilmar International

Austevoll Seafood ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Wilmar International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmar International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, Wilmar International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Austevoll Seafood and Wilmar International

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

The idea behind Austevoll Seafood ASA and Wilmar International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.