Correlation Between EIDESVIK OFFSHORE and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and MEDICAL FACILITIES 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 MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and MEDICAL FACILITIES.
Diversification Opportunities for EIDESVIK OFFSHORE and MEDICAL FACILITIES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EIDESVIK and MEDICAL is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and MEDICAL FACILITIES
Assuming the 90 days horizon EIDESVIK OFFSHORE is expected to generate 11.1 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, EIDESVIK OFFSHORE NK is 1.69 times less risky than MEDICAL FACILITIES. It trades about 0.03 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 960.00 in MEDICAL FACILITIES NEW on August 29, 2024 and sell it today you would earn a total of 120.00 from holding MEDICAL FACILITIES NEW or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| MEDICAL FACILITIES NEW |
EIDESVIK OFFSHORE and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and MEDICAL FACILITIES
The main advantage of trading using opposite EIDESVIK OFFSHORE and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| EIDESVIK OFFSHORE vs. MOVIE GAMES SA | EIDESVIK OFFSHORE vs. Townsquare Media | EIDESVIK OFFSHORE vs. Flutter Entertainment PLC | EIDESVIK OFFSHORE vs. RCS MediaGroup SpA |
| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. NMI Holdings | MEDICAL FACILITIES vs. Origin Agritech |
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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