Correlation Between Byggma and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Byggma 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 Byggma and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byggma and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Byggma 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 Byggma with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggma and Eidesvik Offshore.
Diversification Opportunities for Byggma and Eidesvik Offshore
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Byggma and Eidesvik is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Byggma 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 Byggma 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 Byggma 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 Byggma i.e., Byggma and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Byggma and Eidesvik Offshore
Assuming the 90 days trading horizon Byggma is expected to generate 2.02 times more return on investment than Eidesvik Offshore. However, Byggma is 2.02 times more volatile than Eidesvik Offshore ASA. It trades about 0.03 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.07 per unit of risk. If you would invest 1,685 in Byggma on November 3, 2024 and sell it today you would earn a total of 15.00 from holding Byggma or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byggma vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Byggma |
| Eidesvik Offshore ASA |
Byggma and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggma and Eidesvik Offshore
The main advantage of trading using opposite Byggma and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggma 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.| Byggma vs. AF Gruppen ASA | Byggma vs. American Shipping | Byggma vs. Arendals Fossekompani ASA | Byggma vs. Kid ASA |
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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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