Correlation Between CENTRAL PUERTO and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both CENTRAL PUERTO 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 CENTRAL PUERTO and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENTRAL PUERTO ADR1 and Eidesvik Offshore ASA, you can compare the effects of market volatilities on CENTRAL PUERTO 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 CENTRAL PUERTO with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTRAL PUERTO and Eidesvik Offshore.
Diversification Opportunities for CENTRAL PUERTO and Eidesvik Offshore
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CENTRAL and Eidesvik is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CENTRAL PUERTO ADR1 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 CENTRAL PUERTO 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 CENTRAL PUERTO ADR1 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 CENTRAL PUERTO i.e., CENTRAL PUERTO and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between CENTRAL PUERTO and Eidesvik Offshore
Assuming the 90 days trading horizon CENTRAL PUERTO ADR1 is expected to generate 1.15 times more return on investment than Eidesvik Offshore. However, CENTRAL PUERTO is 1.15 times more volatile than Eidesvik Offshore ASA. It trades about 0.11 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.03 per unit of risk. If you would invest 603.00 in CENTRAL PUERTO ADR1 on September 14, 2024 and sell it today you would earn a total of 777.00 from holding CENTRAL PUERTO ADR1 or generate 128.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTRAL PUERTO ADR1 vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| CENTRAL PUERTO ADR1 |
| Eidesvik Offshore ASA |
CENTRAL PUERTO and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTRAL PUERTO and Eidesvik Offshore
The main advantage of trading using opposite CENTRAL PUERTO and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTRAL PUERTO 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.| CENTRAL PUERTO vs. Eidesvik Offshore ASA | CENTRAL PUERTO vs. ECHO INVESTMENT ZY | CENTRAL PUERTO vs. REGAL ASIAN INVESTMENTS | CENTRAL PUERTO vs. REINET INVESTMENTS SCA |
| Eidesvik Offshore vs. Tenaris SA | Eidesvik Offshore vs. NOV Inc | Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. SIVERS SEMICONDUCTORS AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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