Correlation Between EIDESVIK OFFSHORE and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and RCI Hospitality 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 EIDESVIK OFFSHORE and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EIDESVIK OFFSHORE NK and RCI Hospitality Holdings, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and RCI Hospitality 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 EIDESVIK OFFSHORE with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and RCI Hospitality.
Diversification Opportunities for EIDESVIK OFFSHORE and RCI Hospitality
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EIDESVIK and RCI is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality Holdings and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK are associated (or correlated) with RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and RCI Hospitality go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and RCI Hospitality
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to generate 1.38 times more return on investment than RCI Hospitality. However, EIDESVIK OFFSHORE is 1.38 times more volatile than RCI Hospitality Holdings. It trades about 0.04 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about -0.02 per unit of risk. If you would invest 73.00 in EIDESVIK OFFSHORE NK on October 11, 2024 and sell it today you would earn a total of 37.00 from holding EIDESVIK OFFSHORE NK or generate 50.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. RCI Hospitality Holdings
Performance |
Timeline |
EIDESVIK OFFSHORE |
RCI Hospitality Holdings |
EIDESVIK OFFSHORE and RCI Hospitality Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EIDESVIK OFFSHORE and RCI Hospitality
The main advantage of trading using opposite EIDESVIK OFFSHORE and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, RCI Hospitality 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 RCI Hospitality will offset losses from the drop in RCI Hospitality's long position.EIDESVIK OFFSHORE vs. NEWELL RUBBERMAID | EIDESVIK OFFSHORE vs. PARKEN Sport Entertainment | EIDESVIK OFFSHORE vs. Rayonier Advanced Materials | EIDESVIK OFFSHORE vs. DICKS Sporting Goods |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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