Correlation Between Forsys Metals and Austevoll Seafood

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

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

Diversification Opportunities for Forsys Metals and Austevoll Seafood

0.36

Correlation Coefficient

Forsys Metals  Austevoll Seafood

Weak diversification

The 3 months correlation between Forsys and Austevoll is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Forsys Metals Corp 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 Forsys Metals 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 Forsys Metals Corp 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 Forsys Metals i.e., Forsys Metals and Austevoll Seafood go up and down completely randomly.

Pair Corralation between Forsys Metals and Austevoll Seafood

Assuming the 90 days horizon Forsys Metals Corp is expected to under-perform the Austevoll Seafood. In addition to that, Forsys Metals is 2.14 times more volatile than Austevoll Seafood ASA. It trades about -0.12 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.0 per unit of volatility. If you would invest  874.00  in Austevoll Seafood ASA on October 26, 2024 and sell it today you would lose (9.00) from holding Austevoll Seafood ASA or give up 1.03% of portfolio value over 90 days.

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

Forsys Metals Corp  vs.  Austevoll Seafood ASA

Forsys Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forsys Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Austevoll Seafood ASA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Forsys Metals and Austevoll Seafood

The main advantage of trading using opposite Forsys Metals and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forsys Metals 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 Forsys Metals Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.