Correlation Between Xiwang Special and EIDESVIK OFFSHORE

Can any of the company-specific risk be diversified away by investing in both Xiwang Special 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 Xiwang Special and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xiwang Special Steel and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on Xiwang Special 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 Xiwang Special with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiwang Special and EIDESVIK OFFSHORE.

Diversification Opportunities for Xiwang Special and EIDESVIK OFFSHORE

0.0

Correlation Coefficient

Xiwang Special  EIDESVIK OFFSHORE

Pay attention - limited upside

The 3 months correlation between Xiwang and EIDESVIK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xiwang Special Steel and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and Xiwang Special 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 Xiwang Special Steel 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 has no effect on the direction of Xiwang Special i.e., Xiwang Special and EIDESVIK OFFSHORE go up and down completely randomly.

Pair Corralation between Xiwang Special and EIDESVIK OFFSHORE

If you would invest  110.00  in EIDESVIK OFFSHORE NK on October 10, 2024 and sell it today you would earn a total of  2.00  from holding EIDESVIK OFFSHORE NK or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Xiwang Special Steel  vs.  EIDESVIK OFFSHORE NK

Xiwang Special Steel

Risk-Adjusted Performance

0 of 100

Very Weak

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

EIDESVIK OFFSHORE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Xiwang Special and EIDESVIK OFFSHORE

The main advantage of trading using opposite Xiwang Special and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiwang Special 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 Xiwang Special Steel and EIDESVIK OFFSHORE NK 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.