Correlation Between Eidesvik Offshore and Corporate Office

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

Diversification Opportunities for Eidesvik Offshore and Corporate Office

-0.71

Correlation Coefficient

Eidesvik Offshore  Corporate Office

Pay attention - limited upside

The 3 months correlation between Eidesvik and Corporate is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Corporate Office go up and down completely randomly.

Pair Corralation between Eidesvik Offshore and Corporate Office

Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Corporate Office. In addition to that, Eidesvik Offshore is 1.55 times more volatile than Corporate Office Properties. It trades about -0.01 of its total potential returns per unit of risk. Corporate Office Properties is currently generating about 0.02 per unit of volatility. If you would invest  2,852  in Corporate Office Properties on October 13, 2024 and sell it today you would earn a total of  28.00  from holding Corporate Office Properties or generate 0.98% return on investment over 90 days.

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

Eidesvik Offshore ASA  vs.  Corporate Office Properties

Eidesvik Offshore ASA

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Eidesvik Offshore is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Corporate Office Pro

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Office Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Corporate Office 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 Corporate Office

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

The idea behind Eidesvik Offshore ASA and Corporate Office Properties 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.