Correlation Between EIDESVIK OFFSHORE and CarGurus
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and CarGurus 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 EIDESVIK OFFSHORE and CarGurus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EIDESVIK OFFSHORE NK and CarGurus, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and CarGurus 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 EIDESVIK OFFSHORE with a short position of CarGurus. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and CarGurus.
Diversification Opportunities for EIDESVIK OFFSHORE and CarGurus
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EIDESVIK and CarGurus is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and CarGurus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarGurus and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK are associated (or correlated) with CarGurus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarGurus has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and CarGurus go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and CarGurus
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to under-perform the CarGurus. In addition to that, EIDESVIK OFFSHORE is 1.08 times more volatile than CarGurus. It trades about -0.06 of its total potential returns per unit of risk. CarGurus is currently generating about 0.16 per unit of volatility. If you would invest 2,160 in CarGurus on September 2, 2024 and sell it today you would earn a total of 1,400 from holding CarGurus or generate 64.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. CarGurus
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| CarGurus |
EIDESVIK OFFSHORE and CarGurus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and CarGurus
The main advantage of trading using opposite EIDESVIK OFFSHORE and CarGurus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, CarGurus 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 CarGurus will offset losses from the drop in CarGurus' long position.| EIDESVIK OFFSHORE vs. Scandinavian Tobacco Group | EIDESVIK OFFSHORE vs. MI Homes | EIDESVIK OFFSHORE vs. Ares Management Corp | EIDESVIK OFFSHORE vs. Perdoceo Education |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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