Correlation Between SIEM OFFSHORE and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both SIEM 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 SIEM 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 SIEM OFFSHORE NEW and Eidesvik Offshore ASA, you can compare the effects of market volatilities on SIEM 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 SIEM OFFSHORE with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and Eidesvik Offshore.
Diversification Opportunities for SIEM OFFSHORE and Eidesvik Offshore
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SIEM and Eidesvik is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and Eidesvik Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eidesvik Offshore ASA and SIEM 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 SIEM OFFSHORE NEW 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 ASA has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between SIEM OFFSHORE and Eidesvik Offshore
Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to generate 1.06 times more return on investment than Eidesvik Offshore. However, SIEM OFFSHORE is 1.06 times more volatile than Eidesvik Offshore ASA. It trades about 0.05 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.04 per unit of risk. If you would invest 116.00 in SIEM OFFSHORE NEW on September 25, 2024 and sell it today you would earn a total of 88.00 from holding SIEM OFFSHORE NEW or generate 75.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SIEM OFFSHORE NEW vs. Eidesvik Offshore ASA
Performance |
Timeline |
SIEM OFFSHORE NEW |
Eidesvik Offshore ASA |
SIEM OFFSHORE and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SIEM OFFSHORE and Eidesvik Offshore
The main advantage of trading using opposite SIEM OFFSHORE and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM 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.SIEM OFFSHORE vs. Enbridge | ||
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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