Correlation Between Spire Healthcare and Austevoll Seafood

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Can any of the company-specific risk be diversified away by investing in both Spire Healthcare 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 Spire Healthcare and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and Austevoll Seafood ASA, you can compare the effects of market volatilities on Spire Healthcare 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 Spire Healthcare with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Austevoll Seafood.

Diversification Opportunities for Spire Healthcare and Austevoll Seafood

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Spire and Austevoll is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare i.e., Spire Healthcare and Austevoll Seafood go up and down completely randomly.

Pair Corralation between Spire Healthcare and Austevoll Seafood

Assuming the 90 days trading horizon Spire Healthcare is expected to generate 7.23 times less return on investment than Austevoll Seafood. But when comparing it to its historical volatility, Spire Healthcare Group is 1.33 times less risky than Austevoll Seafood. It trades about 0.0 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,277  in Austevoll Seafood ASA on September 24, 2024 and sell it today you would earn a total of  1,311  from holding Austevoll Seafood ASA or generate 15.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Spire Healthcare Group  vs.  Austevoll Seafood ASA

 Performance 
       Timeline  
Spire Healthcare 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Spire Healthcare Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Spire Healthcare is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Austevoll Seafood ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Austevoll Seafood ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Austevoll Seafood is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Spire Healthcare and Austevoll Seafood Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Spire Healthcare and Austevoll Seafood

The main advantage of trading using opposite Spire Healthcare and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare 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 Spire Healthcare 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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