Correlation Between EIDESVIK OFFSHORE and WideOpenWest

Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and WideOpenWest 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 WideOpenWest 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 WideOpenWest, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and WideOpenWest 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 WideOpenWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and WideOpenWest.

Diversification Opportunities for EIDESVIK OFFSHORE and WideOpenWest

-0.56

Correlation Coefficient

EIDESVIK OFFSHORE  WideOpenWest

Excellent diversification

The 3 months correlation between EIDESVIK and WideOpenWest is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and WideOpenWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WideOpenWest 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 WideOpenWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WideOpenWest has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and WideOpenWest go up and down completely randomly.

Pair Corralation between EIDESVIK OFFSHORE and WideOpenWest

Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to under-perform the WideOpenWest. In addition to that, EIDESVIK OFFSHORE is 1.25 times more volatile than WideOpenWest. It trades about -0.03 of its total potential returns per unit of risk. WideOpenWest is currently generating about 0.0 per unit of volatility. If you would invest  478.00  in WideOpenWest on September 17, 2024 and sell it today you would lose (8.00) from holding WideOpenWest or give up 1.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

EIDESVIK OFFSHORE NK  vs.  WideOpenWest

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

WideOpenWest

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with EIDESVIK OFFSHORE and WideOpenWest

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

The idea behind EIDESVIK OFFSHORE NK and WideOpenWest 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.