Correlation Between Austevoll Seafood and Home Depot
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Home Depot 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 Home Depot 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 Home Depot, you can compare the effects of market volatilities on Austevoll Seafood and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Home Depot.
Diversification Opportunities for Austevoll Seafood and Home Depot
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Austevoll and Home is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Home Depot go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Home Depot
Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to under-perform the Home Depot. In addition to that, Austevoll Seafood is 1.37 times more volatile than Home Depot. It trades about -0.03 of its total potential returns per unit of risk. Home Depot is currently generating about 0.03 per unit of volatility. If you would invest 29,135 in Home Depot on January 20, 2024 and sell it today you would earn a total of 4,401 from holding Home Depot or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Home Depot
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Home Depot |
Austevoll Seafood and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Home Depot
The main advantage of trading using opposite Austevoll Seafood and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| Austevoll Seafood vs. Telenor ASA | Austevoll Seafood vs. DnB ASA | Austevoll Seafood vs. Yara International ASA | Austevoll Seafood vs. Storebrand ASA |
| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Live Ventures |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |