Correlation Between EIDESVIK OFFSHORE and NIPPON TELTEL
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and NIPPON TELTEL 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 NIPPON TELTEL 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 NIPPON TELTEL, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and NIPPON TELTEL 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 NIPPON TELTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and NIPPON TELTEL.
Diversification Opportunities for EIDESVIK OFFSHORE and NIPPON TELTEL
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EIDESVIK and NIPPON is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and NIPPON TELTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIPPON TELTEL 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 NIPPON TELTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIPPON TELTEL has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and NIPPON TELTEL go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and NIPPON TELTEL
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to generate 2.75 times more return on investment than NIPPON TELTEL. However, EIDESVIK OFFSHORE is 2.75 times more volatile than NIPPON TELTEL. It trades about 0.04 of its potential returns per unit of risk. NIPPON TELTEL is currently generating about -0.01 per unit of risk. If you would invest 69.00 in EIDESVIK OFFSHORE NK on September 20, 2024 and sell it today you would earn a total of 41.00 from holding EIDESVIK OFFSHORE NK or generate 59.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. NIPPON TELTEL
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| NIPPON TELTEL |
EIDESVIK OFFSHORE and NIPPON TELTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and NIPPON TELTEL
The main advantage of trading using opposite EIDESVIK OFFSHORE and NIPPON TELTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, NIPPON TELTEL 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 NIPPON TELTEL will offset losses from the drop in NIPPON TELTEL's long position.| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
| NIPPON TELTEL vs. EIDESVIK OFFSHORE NK | NIPPON TELTEL vs. United States Steel | NIPPON TELTEL vs. BlueScope Steel Limited | NIPPON TELTEL vs. Natural Health Trends |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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