Correlation Between EIDESVIK OFFSHORE and Japan Post
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and Japan Post 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 Japan Post 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 Japan Post Insurance, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and Japan Post.
Diversification Opportunities for EIDESVIK OFFSHORE and Japan Post
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EIDESVIK and Japan is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance 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 Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Insurance has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and Japan Post go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and Japan Post
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to generate 1.55 times more return on investment than Japan Post. However, EIDESVIK OFFSHORE is 1.55 times more volatile than Japan Post Insurance. It trades about 0.06 of its potential returns per unit of risk. Japan Post Insurance is currently generating about 0.08 per unit of risk. If you would invest 110.00 in EIDESVIK OFFSHORE NK on October 20, 2024 and sell it today you would earn a total of 2.00 from holding EIDESVIK OFFSHORE NK or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. Japan Post Insurance
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| Japan Post Insurance |
EIDESVIK OFFSHORE and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and Japan Post
The main advantage of trading using opposite EIDESVIK OFFSHORE and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.| EIDESVIK OFFSHORE vs. Strategic Education | EIDESVIK OFFSHORE vs. CEOTRONICS | EIDESVIK OFFSHORE vs. Ares Management Corp | EIDESVIK OFFSHORE vs. Cleanaway Waste Management |
| Japan Post vs. LANDSEA GREEN MANAGEMENT | Japan Post vs. EIDESVIK OFFSHORE NK | Japan Post vs. Corporate Travel Management | Japan Post vs. Brockhaus Capital Management |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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