Correlation Between Austevoll Seafood and Nordic Technology

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

Diversification Opportunities for Austevoll Seafood and Nordic Technology

-0.66

Correlation Coefficient

Austevoll Seafood  Nordic Technology

Excellent diversification

The 3 months correlation between Austevoll and Nordic is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Nordic Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Technology 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 Nordic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Technology has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Nordic Technology go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Nordic Technology

Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 0.58 times more return on investment than Nordic Technology. However, Austevoll Seafood ASA is 1.72 times less risky than Nordic Technology. It trades about 0.11 of its potential returns per unit of risk. Nordic Technology Group is currently generating about -0.09 per unit of risk. If you would invest  9,290  in Austevoll Seafood ASA on September 4, 2024 and sell it today you would earn a total of  750.00  from holding Austevoll Seafood ASA or generate 8.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Austevoll Seafood ASA  vs.  Nordic Technology Group

Austevoll Seafood ASA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 8 (%) 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 January 2025.

Nordic Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordic Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Austevoll Seafood and Nordic Technology

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

The idea behind Austevoll Seafood ASA and Nordic Technology Group 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.