Correlation Between Aedas Homes and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Aedas Homes 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 Aedas Homes and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on Aedas Homes 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 Aedas Homes with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and EIDESVIK OFFSHORE.
Diversification Opportunities for Aedas Homes and EIDESVIK OFFSHORE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aedas and EIDESVIK is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and Aedas Homes 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 Aedas Homes SA 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 Aedas Homes i.e., Aedas Homes and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between Aedas Homes and EIDESVIK OFFSHORE
Assuming the 90 days horizon Aedas Homes SA is expected to under-perform the EIDESVIK OFFSHORE. In addition to that, Aedas Homes is 1.39 times more volatile than EIDESVIK OFFSHORE NK. It trades about -0.1 of its total potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about -0.08 per unit of volatility. If you would invest 113.00 in EIDESVIK OFFSHORE NK on September 1, 2024 and sell it today you would lose (3.00) from holding EIDESVIK OFFSHORE NK or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| Aedas Homes SA |
| EIDESVIK OFFSHORE |
Aedas Homes and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and EIDESVIK OFFSHORE
The main advantage of trading using opposite Aedas Homes and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes 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 Aedas Homes SA and EIDESVIK OFFSHORE NK 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.| EIDESVIK OFFSHORE vs. LGI Homes | EIDESVIK OFFSHORE vs. UMC Electronics Co | EIDESVIK OFFSHORE vs. Richardson Electronics | EIDESVIK OFFSHORE vs. Aedas Homes SA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |