Correlation Between Austevoll Seafood and ZhongAn Online

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

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

Diversification Opportunities for Austevoll Seafood and ZhongAn Online

0.51

Correlation Coefficient

Austevoll Seafood  ZhongAn Online

Very weak diversification

The 3 months correlation between Austevoll and ZhongAn is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and Austevoll 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 Austevoll Seafood ASA are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and ZhongAn Online go up and down completely randomly.

Pair Corralation between Austevoll Seafood and ZhongAn Online

Assuming the 90 days horizon Austevoll Seafood is expected to generate 1.27 times less return on investment than ZhongAn Online. But when comparing it to its historical volatility, Austevoll Seafood ASA is 1.97 times less risky than ZhongAn Online. It trades about 0.07 of its potential returns per unit of risk. ZhongAn Online P is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  143.00  in ZhongAn Online P on December 22, 2024 and sell it today you would earn a total of  9.00  from holding ZhongAn Online P or generate 6.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Austevoll Seafood ASA  vs.  ZhongAn Online P

Austevoll Seafood ASA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ZhongAn Online P

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZhongAn Online P are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ZhongAn Online may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Austevoll Seafood and ZhongAn Online

The main advantage of trading using opposite Austevoll Seafood and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.

The idea behind Austevoll Seafood ASA and ZhongAn Online P 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.