Correlation Between Austevoll Seafood and PT Bank

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

Diversification Opportunities for Austevoll Seafood and PT Bank

-0.3

Correlation Coefficient

Austevoll Seafood  PT Bank

Very good diversification

The 3 months correlation between Austevoll and BYRA is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and PT Bank go up and down completely randomly.

Pair Corralation between Austevoll Seafood and PT Bank

Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 1.13 times more return on investment than PT Bank. However, Austevoll Seafood is 1.13 times more volatile than PT Bank Rakyat. It trades about 0.07 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.01 per unit of risk. If you would invest  284.00  in Austevoll Seafood ASA on October 5, 2024 and sell it today you would earn a total of  535.00  from holding Austevoll Seafood ASA or generate 188.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Austevoll Seafood ASA  vs.  PT Bank Rakyat

Austevoll Seafood ASA

Risk-Adjusted Performance

0 of 100

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 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.

PT Bank Rakyat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Austevoll Seafood and PT Bank

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

The idea behind Austevoll Seafood ASA and PT Bank Rakyat 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.