Correlation Between Eidesvik Offshore and Toshiba Tec
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Toshiba Tec 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 Toshiba Tec 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 Toshiba Tec, you can compare the effects of market volatilities on Eidesvik Offshore and Toshiba Tec 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 Toshiba Tec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Toshiba Tec.
Diversification Opportunities for Eidesvik Offshore and Toshiba Tec
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eidesvik and Toshiba is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Toshiba Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toshiba Tec 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 Toshiba Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toshiba Tec has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Toshiba Tec go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Toshiba Tec
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.03 times more return on investment than Toshiba Tec. However, Eidesvik Offshore is 1.03 times more volatile than Toshiba Tec. It trades about -0.06 of its potential returns per unit of risk. Toshiba Tec is currently generating about -0.12 per unit of risk. If you would invest 111.00 in Eidesvik Offshore ASA on December 24, 2024 and sell it today you would lose (10.00) from holding Eidesvik Offshore ASA or give up 9.01% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Eidesvik Offshore ASA vs. Toshiba Tec
Performance |
Timeline |
Eidesvik Offshore ASA |
Toshiba Tec |
Eidesvik Offshore and Toshiba Tec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eidesvik Offshore and Toshiba Tec
The main advantage of trading using opposite Eidesvik Offshore and Toshiba Tec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Toshiba Tec 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 Toshiba Tec will offset losses from the drop in Toshiba Tec's long position.Eidesvik Offshore vs. Casio Computer CoLtd | Eidesvik Offshore vs. Take Two Interactive Software | Eidesvik Offshore vs. GEELY AUTOMOBILE | Eidesvik Offshore vs. Firan Technology Group |
Toshiba Tec vs. Zijin Mining Group | Toshiba Tec vs. Charter Communications | Toshiba Tec vs. Rocket Internet SE | Toshiba Tec vs. INTERSHOP Communications Aktiengesellschaft |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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