Correlation Between SIVERS SEMICONDUCTORS and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIVERS SEMICONDUCTORS AB and Eidesvik Offshore ASA, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Eidesvik Offshore.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Eidesvik Offshore
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SIVERS and Eidesvik is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB 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 SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB 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 SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Eidesvik Offshore
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 2.84 times more return on investment than Eidesvik Offshore. However, SIVERS SEMICONDUCTORS is 2.84 times more volatile than Eidesvik Offshore ASA. It trades about 0.16 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.06 per unit of risk. If you would invest 26.00 in SIVERS SEMICONDUCTORS AB on November 27, 2024 and sell it today you would earn a total of 4.00 from holding SIVERS SEMICONDUCTORS AB or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| Eidesvik Offshore ASA |
SIVERS SEMICONDUCTORS and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Eidesvik Offshore
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS 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.| SIVERS SEMICONDUCTORS vs. Cairo Communication SpA | SIVERS SEMICONDUCTORS vs. JSC Halyk bank | SIVERS SEMICONDUCTORS vs. Entravision Communications | SIVERS SEMICONDUCTORS vs. REVO INSURANCE SPA |
| Eidesvik Offshore vs. INSURANCE AUST GRP | Eidesvik Offshore vs. PLANT VEDA FOODS | Eidesvik Offshore vs. Nomad Foods | Eidesvik Offshore vs. LIFENET INSURANCE CO |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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