Correlation Between EIDESVIK OFFSHORE and PLAYTIKA HOLDING
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and PLAYTIKA HOLDING.
Diversification Opportunities for EIDESVIK OFFSHORE and PLAYTIKA HOLDING
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EIDESVIK and PLAYTIKA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and PLAYTIKA HOLDING go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and PLAYTIKA HOLDING
Assuming the 90 days horizon EIDESVIK OFFSHORE is expected to generate 11.13 times less return on investment than PLAYTIKA HOLDING. But when comparing it to its historical volatility, EIDESVIK OFFSHORE NK is 1.64 times less risky than PLAYTIKA HOLDING. It trades about 0.04 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 720.00 in PLAYTIKA HOLDING DL 01 on August 27, 2024 and sell it today you would earn a total of 90.00 from holding PLAYTIKA HOLDING DL 01 or generate 12.5% 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. PLAYTIKA HOLDING DL 01
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| PLAYTIKA HOLDING |
EIDESVIK OFFSHORE and PLAYTIKA HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and PLAYTIKA HOLDING
The main advantage of trading using opposite EIDESVIK OFFSHORE and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, PLAYTIKA HOLDING 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 PLAYTIKA HOLDING will offset losses from the drop in PLAYTIKA HOLDING's long position.| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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