Correlation Between CN MODERN and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both CN MODERN 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 CN MODERN and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on CN MODERN 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 CN MODERN with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and EIDESVIK OFFSHORE.
Diversification Opportunities for CN MODERN and EIDESVIK OFFSHORE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 07M and EIDESVIK is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and CN MODERN 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 CN MODERN DAIRY 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 CN MODERN i.e., CN MODERN and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between CN MODERN and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to under-perform the EIDESVIK OFFSHORE. In addition to that, CN MODERN is 1.17 times more volatile than EIDESVIK OFFSHORE NK. It trades about -0.08 of its total potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.04 per unit of volatility. If you would invest 110.00 in EIDESVIK OFFSHORE NK on August 31, 2024 and sell it today you would earn a total of 1.00 from holding EIDESVIK OFFSHORE NK or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| CN MODERN DAIRY |
| EIDESVIK OFFSHORE |
CN MODERN and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and EIDESVIK OFFSHORE
The main advantage of trading using opposite CN MODERN and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN 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.| CN MODERN vs. SIVERS SEMICONDUCTORS AB | CN MODERN vs. Darden Restaurants | CN MODERN vs. Reliance Steel Aluminum | CN MODERN vs. Q2M Managementberatung AG |
| EIDESVIK OFFSHORE vs. Iridium Communications | EIDESVIK OFFSHORE vs. SBA Communications Corp | EIDESVIK OFFSHORE vs. United Airlines Holdings | EIDESVIK OFFSHORE vs. JAPAN AIRLINES |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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