Correlation Between NIKKON HOLDINGS and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both NIKKON HOLDINGS 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 NIKKON HOLDINGS and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKKON HOLDINGS TD and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on NIKKON HOLDINGS 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 NIKKON HOLDINGS with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKKON HOLDINGS and EIDESVIK OFFSHORE.
Diversification Opportunities for NIKKON HOLDINGS and EIDESVIK OFFSHORE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NIKKON and EIDESVIK is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding NIKKON HOLDINGS TD and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and NIKKON HOLDINGS 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 NIKKON HOLDINGS TD 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 NIKKON HOLDINGS i.e., NIKKON HOLDINGS and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between NIKKON HOLDINGS and EIDESVIK OFFSHORE
Assuming the 90 days horizon NIKKON HOLDINGS TD is expected to generate 0.39 times more return on investment than EIDESVIK OFFSHORE. However, NIKKON HOLDINGS TD is 2.53 times less risky than EIDESVIK OFFSHORE. It trades about 0.18 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about -0.02 per unit of risk. If you would invest 1,140 in NIKKON HOLDINGS TD on September 13, 2024 and sell it today you would earn a total of 100.00 from holding NIKKON HOLDINGS TD or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
NIKKON HOLDINGS TD vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| NIKKON HOLDINGS TD |
| EIDESVIK OFFSHORE |
NIKKON HOLDINGS and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKKON HOLDINGS and EIDESVIK OFFSHORE
The main advantage of trading using opposite NIKKON HOLDINGS and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKKON HOLDINGS 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.| NIKKON HOLDINGS vs. EIDESVIK OFFSHORE NK | NIKKON HOLDINGS vs. SIEM OFFSHORE NEW | NIKKON HOLDINGS vs. MOVIE GAMES SA | NIKKON HOLDINGS vs. AOYAMA TRADING |
| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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