Correlation Between Eidesvik Offshore and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore 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 Eidesvik Offshore and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on Eidesvik Offshore 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 Eidesvik Offshore with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and EIDESVIK OFFSHORE.
Diversification Opportunities for Eidesvik Offshore and EIDESVIK OFFSHORE
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eidesvik and EIDESVIK is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 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 Eidesvik Offshore i.e., Eidesvik Offshore and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.38 times more return on investment than EIDESVIK OFFSHORE. However, Eidesvik Offshore is 1.38 times more volatile than EIDESVIK OFFSHORE NK. It trades about 0.09 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.06 per unit of risk. If you would invest 108.00 in Eidesvik Offshore ASA on October 23, 2024 and sell it today you would earn a total of 4.00 from holding Eidesvik Offshore ASA or generate 3.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Eidesvik Offshore ASA vs. EIDESVIK OFFSHORE NK
Performance |
Timeline |
Eidesvik Offshore ASA |
EIDESVIK OFFSHORE |
Eidesvik Offshore and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eidesvik Offshore and EIDESVIK OFFSHORE
The main advantage of trading using opposite Eidesvik Offshore and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore 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.Eidesvik Offshore vs. NORTHEAST UTILITIES | Eidesvik Offshore vs. Hochschild Mining plc | Eidesvik Offshore vs. MOVIE GAMES SA | Eidesvik Offshore vs. OURGAME INTHOLDL 00005 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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