Correlation Between Tyson Foods and Austevoll Seafood

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

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

Diversification Opportunities for Tyson Foods and Austevoll Seafood

-0.52

Correlation Coefficient

Tyson Foods  Austevoll Seafood

Excellent diversification

The 3 months correlation between Tyson and Austevoll is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods 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 Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Austevoll Seafood go up and down completely randomly.

Pair Corralation between Tyson Foods and Austevoll Seafood

Considering the 90-day investment horizon Tyson Foods is expected to generate 10.06 times less return on investment than Austevoll Seafood. In addition to that, Tyson Foods is 1.66 times more volatile than Austevoll Seafood ASA. It trades about 0.0 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.06 per unit of volatility. If you would invest  855.00  in Austevoll Seafood ASA on September 15, 2024 and sell it today you would earn a total of  25.00  from holding Austevoll Seafood ASA or generate 2.92% return on investment over 90 days.

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

Tyson Foods  vs.  Austevoll Seafood ASA

Tyson Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tyson Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Tyson Foods is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 stable basic indicators, Austevoll Seafood is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tyson Foods and Austevoll Seafood

The main advantage of trading using opposite Tyson Foods and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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 Tyson Foods 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.