Correlation Between Austevoll Seafood and Smurfit Kappa

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

Diversification Opportunities for Austevoll Seafood and Smurfit Kappa

0.0

Correlation Coefficient

Austevoll Seafood  Smurfit Kappa

Pay attention - limited upside

The 3 months correlation between Austevoll and Smurfit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Smurfit Kappa Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit Kappa Group 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 Smurfit Kappa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit Kappa Group has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Smurfit Kappa go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Smurfit Kappa

Assuming the 90 days horizon Austevoll Seafood ASA is expected to under-perform the Smurfit Kappa. In addition to that, Austevoll Seafood is 1.23 times more volatile than Smurfit Kappa Group. It trades about -0.13 of its total potential returns per unit of risk. Smurfit Kappa Group is currently generating about 0.04 per unit of volatility. If you would invest  5,120  in Smurfit Kappa Group on October 6, 2024 and sell it today you would earn a total of  50.00  from holding Smurfit Kappa Group or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Austevoll Seafood ASA  vs.  Smurfit Kappa Group

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Smurfit Kappa Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smurfit Kappa Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Smurfit Kappa is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Austevoll Seafood and Smurfit Kappa

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

The idea behind Austevoll Seafood ASA and Smurfit Kappa Group 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.