Correlation Between Austevoll Seafood and GAMESTOP

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

Diversification Opportunities for Austevoll Seafood and GAMESTOP

0.32

Correlation Coefficient

Austevoll Seafood  GAMESTOP

Weak diversification

The 3 months correlation between Austevoll and GAMESTOP is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and GAMESTOP go up and down completely randomly.

Pair Corralation between Austevoll Seafood and GAMESTOP

Assuming the 90 days horizon Austevoll Seafood is expected to generate 10.46 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, Austevoll Seafood ASA is 1.89 times less risky than GAMESTOP. It trades about 0.05 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,858  in GAMESTOP on October 9, 2024 and sell it today you would earn a total of  1,411  from holding GAMESTOP or generate 75.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Austevoll Seafood ASA  vs.  GAMESTOP

Austevoll Seafood ASA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 3 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

GAMESTOP

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GAMESTOP are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GAMESTOP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Austevoll Seafood and GAMESTOP

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

The idea behind Austevoll Seafood ASA and GAMESTOP 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.