Correlation Between SIEM OFFSHORE and Eidesvik Offshore

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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

SIEMEidesvikDiversified AwaySIEMEidesvikDiversified Away100%
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 Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

SIEM OFFSHORE NEW  vs.  Eidesvik Offshore ASA

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-505
JavaScript chart by amCharts 3.21.15S5H0 E1V
       Timeline  
SIEM OFFSHORE NEW 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SIEM OFFSHORE NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec22.12.22.32.42.5
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.11.151.21.251.3

SIEM OFFSHORE and Eidesvik Offshore Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.17-3.12-2.08-1.03-0.0160.951.912.873.83 0.050.060.070.080.09
JavaScript chart by amCharts 3.21.15S5H0 E1V
       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.
The idea behind SIEM OFFSHORE NEW and Eidesvik Offshore ASA 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.
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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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