Correlation Between Eidesvik Offshore and CVS Health

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

Diversification Opportunities for Eidesvik Offshore and CVS Health

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Eidesvik and CVS is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health 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 ASA are associated (or correlated) with CVS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Health has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and CVS Health go up and down completely randomly.

Pair Corralation between Eidesvik Offshore and CVS Health

Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.28 times more return on investment than CVS Health. However, Eidesvik Offshore is 1.28 times more volatile than CVS Health. It trades about 0.02 of its potential returns per unit of risk. CVS Health is currently generating about -0.03 per unit of risk. If you would invest  102.00  in Eidesvik Offshore ASA on October 5, 2024 and sell it today you would earn a total of  12.00  from holding Eidesvik Offshore ASA or generate 11.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.78%
ValuesDaily Returns

Eidesvik Offshore ASA  vs.  CVS Health

 Performance 
       Timeline  
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 latest fragile 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.
CVS Health 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CVS Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Eidesvik Offshore and CVS Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eidesvik Offshore and CVS Health

The main advantage of trading using opposite Eidesvik Offshore and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, CVS Health 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 CVS Health will offset losses from the drop in CVS Health's long position.
The idea behind Eidesvik Offshore ASA and CVS Health 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments