Correlation Between Austevoll Seafood and Tekna Holding

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

Diversification Opportunities for Austevoll Seafood and Tekna Holding

-0.31

Correlation Coefficient

Austevoll Seafood  Tekna Holding

Very good diversification

The 3 months correlation between Austevoll and Tekna is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Tekna Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekna Holding AS 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 Tekna Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekna Holding AS has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Tekna Holding go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Tekna Holding

Assuming the 90 days trading horizon Austevoll Seafood is expected to generate 3.67 times less return on investment than Tekna Holding. But when comparing it to its historical volatility, Austevoll Seafood ASA is 5.06 times less risky than Tekna Holding. It trades about 0.3 of its potential returns per unit of risk. Tekna Holding AS is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  310.00  in Tekna Holding AS on September 15, 2024 and sell it today you would earn a total of  89.00  from holding Tekna Holding AS or generate 28.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Austevoll Seafood ASA  vs.  Tekna Holding AS

Austevoll Seafood ASA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Austevoll Seafood is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Tekna Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekna Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Austevoll Seafood and Tekna Holding

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

The idea behind Austevoll Seafood ASA and Tekna Holding 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.