Correlation Between COSTCO WHOLESALE and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE 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 COSTCO WHOLESALE and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSTCO WHOLESALE CDR and Eidesvik Offshore ASA, you can compare the effects of market volatilities on COSTCO WHOLESALE 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 COSTCO WHOLESALE with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and Eidesvik Offshore.
Diversification Opportunities for COSTCO WHOLESALE and Eidesvik Offshore
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSTCO and Eidesvik is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE 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 COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE i.e., COSTCO WHOLESALE and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and Eidesvik Offshore
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.85 times more return on investment than Eidesvik Offshore. However, COSTCO WHOLESALE CDR is 1.18 times less risky than Eidesvik Offshore. It trades about 0.08 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 2,820 in COSTCO WHOLESALE CDR on November 2, 2024 and sell it today you would earn a total of 80.00 from holding COSTCO WHOLESALE CDR or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| Eidesvik Offshore ASA |
COSTCO WHOLESALE and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and Eidesvik Offshore
The main advantage of trading using opposite COSTCO WHOLESALE and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE 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.| COSTCO WHOLESALE vs. PURE FOODS TASMANIA | COSTCO WHOLESALE vs. High Liner Foods | COSTCO WHOLESALE vs. Nomad Foods | COSTCO WHOLESALE vs. Sumitomo Rubber Industries |
| Eidesvik Offshore vs. TITANIUM TRANSPORTGROUP | Eidesvik Offshore vs. Ultra Clean Holdings | Eidesvik Offshore vs. CarsalesCom | Eidesvik Offshore vs. MUTUIONLINE |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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