Correlation Between EIDESVIK OFFSHORE and Edison International
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and Edison International 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 Edison International 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 Edison International, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and Edison International 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 Edison International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and Edison International.
Diversification Opportunities for EIDESVIK OFFSHORE and Edison International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between EIDESVIK and Edison is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and Edison International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison International 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 Edison International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison International has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and Edison International go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and Edison International
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to under-perform the Edison International. In addition to that, EIDESVIK OFFSHORE is 1.98 times more volatile than Edison International. It trades about -0.11 of its total potential returns per unit of risk. Edison International is currently generating about 0.09 per unit of volatility. If you would invest 7,712 in Edison International on August 31, 2024 and sell it today you would earn a total of 560.00 from holding Edison International or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. Edison International
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| Edison International |
EIDESVIK OFFSHORE and Edison International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and Edison International
The main advantage of trading using opposite EIDESVIK OFFSHORE and Edison International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, Edison International 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 Edison International will offset losses from the drop in Edison International's long position.| EIDESVIK OFFSHORE vs. Iridium Communications | EIDESVIK OFFSHORE vs. SBA Communications Corp | EIDESVIK OFFSHORE vs. United Airlines Holdings | EIDESVIK OFFSHORE vs. JAPAN AIRLINES |
| Edison International vs. Waste Management | Edison International vs. Western Copper and | Edison International vs. SERI INDUSTRIAL EO | Edison International vs. Q2M Managementberatung AG |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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