Correlation Between ACCSYS TECHPLC and Eidesvik Offshore

Can any of the company-specific risk be diversified away by investing in both ACCSYS TECHPLC and Eidesvik Offshore 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 ACCSYS TECHPLC and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACCSYS TECHPLC EO and Eidesvik Offshore ASA, you can compare the effects of market volatilities on ACCSYS TECHPLC and Eidesvik Offshore 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 ACCSYS TECHPLC with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCSYS TECHPLC and Eidesvik Offshore.

Diversification Opportunities for ACCSYS TECHPLC and Eidesvik Offshore

0.65

Correlation Coefficient

ACCSYS TECHPLC  Eidesvik Offshore

Poor diversification

The 3 months correlation between ACCSYS and Eidesvik is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ACCSYS TECHPLC EO and Eidesvik Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eidesvik Offshore ASA and ACCSYS TECHPLC 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 ACCSYS TECHPLC EO are associated (or correlated) with Eidesvik Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eidesvik Offshore ASA has no effect on the direction of ACCSYS TECHPLC i.e., ACCSYS TECHPLC and Eidesvik Offshore go up and down completely randomly.

Pair Corralation between ACCSYS TECHPLC and Eidesvik Offshore

Assuming the 90 days horizon ACCSYS TECHPLC EO is expected to under-perform the Eidesvik Offshore. In addition to that, ACCSYS TECHPLC is 2.19 times more volatile than Eidesvik Offshore ASA. It trades about -0.08 of its total potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.12 per unit of volatility. If you would invest  115.00  in Eidesvik Offshore ASA on September 19, 2024 and sell it today you would lose (4.00) from holding Eidesvik Offshore ASA or give up 3.48% of portfolio value over 90 days.

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

ACCSYS TECHPLC EO  vs.  Eidesvik Offshore ASA

ACCSYS TECHPLC EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACCSYS TECHPLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Eidesvik Offshore ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eidesvik Offshore ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ACCSYS TECHPLC and Eidesvik Offshore

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

The idea behind ACCSYS TECHPLC EO and Eidesvik Offshore 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.