Correlation Between WisdomTree Investments and Austevoll Seafood

Can any of the company-specific risk be diversified away by investing in both WisdomTree Investments and Austevoll Seafood 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 WisdomTree Investments and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WisdomTree Investments and Austevoll Seafood ASA, you can compare the effects of market volatilities on WisdomTree Investments and Austevoll Seafood 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 WisdomTree Investments with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Investments and Austevoll Seafood.

Diversification Opportunities for WisdomTree Investments and Austevoll Seafood

0.75

Correlation Coefficient

WisdomTree Investments  Austevoll Seafood

Poor diversification

The 3 months correlation between WisdomTree and Austevoll is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Investments and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and WisdomTree Investments 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 WisdomTree Investments are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of WisdomTree Investments i.e., WisdomTree Investments and Austevoll Seafood go up and down completely randomly.

Pair Corralation between WisdomTree Investments and Austevoll Seafood

Assuming the 90 days horizon WisdomTree Investments is expected to generate 0.93 times more return on investment than Austevoll Seafood. However, WisdomTree Investments is 1.08 times less risky than Austevoll Seafood. It trades about 0.33 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about -0.03 per unit of risk. If you would invest  829.00  in WisdomTree Investments on March 31, 2025 and sell it today you would earn a total of  95.00  from holding WisdomTree Investments or generate 11.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

WisdomTree Investments  vs.  Austevoll Seafood ASA

WisdomTree Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, WisdomTree Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Austevoll Seafood ASA

Risk-Adjusted Performance

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.

Pair Trading with WisdomTree Investments and Austevoll Seafood

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

The idea behind WisdomTree Investments and Austevoll Seafood ASA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.