Correlation Between Check Point and Eidesvik Offshore

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Check Point 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 Check Point and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Check Point 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 Check Point with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Eidesvik Offshore.

Diversification Opportunities for Check Point and Eidesvik Offshore

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Check and Eidesvik is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software 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 Check Point 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 Check Point Software 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 Check Point i.e., Check Point and Eidesvik Offshore go up and down completely randomly.

Pair Corralation between Check Point and Eidesvik Offshore

Assuming the 90 days trading horizon Check Point is expected to generate 4.81 times less return on investment than Eidesvik Offshore. But when comparing it to its historical volatility, Check Point Software is 2.31 times less risky than Eidesvik Offshore. It trades about 0.03 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  108.00  in Eidesvik Offshore ASA on October 22, 2024 and sell it today you would earn a total of  3.00  from holding Eidesvik Offshore ASA or generate 2.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Check Point Software  vs.  Eidesvik Offshore ASA

 Performance 
       Timeline  
Check Point Software 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Check Point Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Check Point is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
Eidesvik Offshore ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 comparatively stable basic indicators, Eidesvik Offshore is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Check Point and Eidesvik Offshore Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Check Point and Eidesvik Offshore

The main advantage of trading using opposite Check Point and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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 Check Point Software 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.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios