Correlation Between Dalata Hotel and Austevoll Seafood

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

By analyzing existing cross correlation between Dalata Hotel Group and Austevoll Seafood ASA, you can compare the effects of market volatilities on Dalata Hotel 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 Dalata Hotel with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Austevoll Seafood.

Diversification Opportunities for Dalata Hotel and Austevoll Seafood

0.06

Correlation Coefficient

Dalata Hotel  Austevoll Seafood

Significant diversification

The 3 months correlation between Dalata and Austevoll is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and Dalata Hotel 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 Dalata Hotel Group 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 ASA has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Austevoll Seafood go up and down completely randomly.

Pair Corralation between Dalata Hotel and Austevoll Seafood

Assuming the 90 days horizon Dalata Hotel Group is expected to generate 0.71 times more return on investment than Austevoll Seafood. However, Dalata Hotel Group is 1.41 times less risky than Austevoll Seafood. It trades about 0.12 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about -0.02 per unit of risk. If you would invest  438.00  in Dalata Hotel Group on October 11, 2024 and sell it today you would earn a total of  16.00  from holding Dalata Hotel Group or generate 3.65% return on investment over 90 days.

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

Dalata Hotel Group  vs.  Austevoll Seafood ASA

Dalata Hotel Group

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dalata Hotel reported solid returns over the last few months and may actually be approaching a breakup point.

Austevoll Seafood ASA

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Austevoll Seafood ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Austevoll Seafood is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dalata Hotel and Austevoll Seafood

The main advantage of trading using opposite Dalata Hotel and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel 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 Dalata Hotel Group and Austevoll Seafood ASA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.