Correlation Between Austevoll Seafood and Teledyne Technologies

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

Diversification Opportunities for Austevoll Seafood and Teledyne Technologies

0.31

Correlation Coefficient

Austevoll Seafood  Teledyne Technologies

Weak diversification

The 3 months correlation between Austevoll and Teledyne is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Teledyne Technologies Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teledyne Technologies 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 Teledyne Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teledyne Technologies has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Teledyne Technologies go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Teledyne Technologies

Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 3.99 times more return on investment than Teledyne Technologies. However, Austevoll Seafood is 3.99 times more volatile than Teledyne Technologies Incorporated. It trades about 0.05 of its potential returns per unit of risk. Teledyne Technologies Incorporated is currently generating about 0.03 per unit of risk. If you would invest  368.00  in Austevoll Seafood ASA on October 11, 2024 and sell it today you would earn a total of  476.00  from holding Austevoll Seafood ASA or generate 129.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Austevoll Seafood ASA  vs.  Teledyne Technologies Incorpor

Austevoll Seafood ASA

Risk-Adjusted Performance

0 of 100

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

Teledyne Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Teledyne Technologies Incorporated are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Teledyne Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Austevoll Seafood and Teledyne Technologies

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

The idea behind Austevoll Seafood ASA and Teledyne Technologies Incorporated 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.