Correlation Between Austevoll Seafood and AOYAMA TRADING

Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING, you can compare the effects of market volatilities on Austevoll Seafood and AOYAMA TRADING 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 AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and AOYAMA TRADING.

Diversification Opportunities for Austevoll Seafood and AOYAMA TRADING

0.54

Correlation Coefficient

Austevoll Seafood  AOYAMA TRADING

Very weak diversification

The 3 months correlation between Austevoll and AOYAMA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING 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 AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and AOYAMA TRADING go up and down completely randomly.

Pair Corralation between Austevoll Seafood and AOYAMA TRADING

Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 1.94 times more return on investment than AOYAMA TRADING. However, Austevoll Seafood is 1.94 times more volatile than AOYAMA TRADING. It trades about -0.07 of its potential returns per unit of risk. AOYAMA TRADING is currently generating about -0.21 per unit of risk. If you would invest  851.00  in Austevoll Seafood ASA on October 4, 2024 and sell it today you would lose (29.00) from holding Austevoll Seafood ASA or give up 3.41% of portfolio value over 90 days.

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

Austevoll Seafood ASA  vs.  AOYAMA TRADING

Austevoll Seafood ASA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 1 (%) 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.

AOYAMA TRADING

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AOYAMA TRADING are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AOYAMA TRADING reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Austevoll Seafood and AOYAMA TRADING

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

The idea behind Austevoll Seafood ASA and AOYAMA TRADING 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.