Correlation Between Grieg Seafood and Austevoll Seafood

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

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

Diversification Opportunities for Grieg Seafood and Austevoll Seafood

0.44

Correlation Coefficient

Grieg Seafood  Austevoll Seafood

Very weak diversification

The 3 months correlation between Grieg and Austevoll is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA 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 Grieg 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 Grieg Seafood ASA 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 Grieg Seafood i.e., Grieg Seafood and Austevoll Seafood go up and down completely randomly.

Pair Corralation between Grieg Seafood and Austevoll Seafood

Assuming the 90 days trading horizon Grieg Seafood ASA is expected to under-perform the Austevoll Seafood. In addition to that, Grieg Seafood is 3.1 times more volatile than Austevoll Seafood ASA. It trades about -0.05 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.01 per unit of volatility. If you would invest  9,780  in Austevoll Seafood ASA on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Austevoll Seafood ASA or generate 0.0% return on investment over 90 days.

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

Grieg Seafood ASA  vs.  Austevoll Seafood ASA

Grieg Seafood ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grieg Seafood ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Austevoll Seafood ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Austevoll Seafood ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Austevoll Seafood is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Grieg Seafood and Austevoll Seafood

The main advantage of trading using opposite Grieg Seafood and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood 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 Grieg Seafood ASA 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.