Correlation Between Austevoll Seafood and Icelandic Salmon

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

Diversification Opportunities for Austevoll Seafood and Icelandic Salmon

-0.67

Correlation Coefficient

Austevoll Seafood  Icelandic Salmon

Excellent diversification

The 3 months correlation between Austevoll and Icelandic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Icelandic Salmon As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icelandic Salmon 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 Icelandic Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icelandic Salmon has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Icelandic Salmon go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Icelandic Salmon

Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 1.17 times more return on investment than Icelandic Salmon. However, Austevoll Seafood is 1.17 times more volatile than Icelandic Salmon As. It trades about 0.08 of its potential returns per unit of risk. Icelandic Salmon As is currently generating about -0.12 per unit of risk. If you would invest  10,070  in Austevoll Seafood ASA on December 1, 2024 and sell it today you would earn a total of  620.00  from holding Austevoll Seafood ASA or generate 6.16% return on investment over 90 days.

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

Austevoll Seafood ASA  vs.  Icelandic Salmon As

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 quite conflicting essential indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Icelandic Salmon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icelandic Salmon As has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Austevoll Seafood and Icelandic Salmon

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

The idea behind Austevoll Seafood ASA and Icelandic Salmon As 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.