Correlation Between AIR PRODCHEMICALS and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Eidesvik Offshore ASA, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Eidesvik Offshore.
Diversification Opportunities for AIR PRODCHEMICALS and Eidesvik Offshore
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIR and Eidesvik is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Eidesvik Offshore
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.65 times more return on investment than Eidesvik Offshore. However, AIR PRODCHEMICALS is 1.55 times less risky than Eidesvik Offshore. It trades about 0.07 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 23,615 in AIR PRODCHEMICALS on September 2, 2024 and sell it today you would earn a total of 8,015 from holding AIR PRODCHEMICALS or generate 33.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Eidesvik Offshore ASA |
AIR PRODCHEMICALS and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Eidesvik Offshore
The main advantage of trading using opposite AIR PRODCHEMICALS and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. SIVERS SEMICONDUCTORS AB | AIR PRODCHEMICALS vs. Darden Restaurants | AIR PRODCHEMICALS vs. Reliance Steel Aluminum | AIR PRODCHEMICALS vs. Q2M Managementberatung AG |
| Eidesvik Offshore vs. Marie Brizard Wine | Eidesvik Offshore vs. Transportadora de Gas | Eidesvik Offshore vs. Transport International Holdings | Eidesvik Offshore vs. BII Railway Transportation |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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