Correlation Between EIDESVIK OFFSHORE and NVIDIA
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and NVIDIA 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 NVIDIA 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 NVIDIA, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and NVIDIA 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 NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and NVIDIA.
Diversification Opportunities for EIDESVIK OFFSHORE and NVIDIA
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between EIDESVIK and NVIDIA is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and NVIDIA go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and NVIDIA
Assuming the 90 days horizon EIDESVIK OFFSHORE is expected to generate 3.57 times less return on investment than NVIDIA. In addition to that, EIDESVIK OFFSHORE is 1.01 times more volatile than NVIDIA. It trades about 0.03 of its total potential returns per unit of risk. NVIDIA is currently generating about 0.12 per unit of volatility. If you would invest 2,076 in NVIDIA on October 30, 2024 and sell it today you would earn a total of 9,236 from holding NVIDIA or generate 444.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. NVIDIA
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| NVIDIA |
EIDESVIK OFFSHORE and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and NVIDIA
The main advantage of trading using opposite EIDESVIK OFFSHORE and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, NVIDIA 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 NVIDIA will offset losses from the drop in NVIDIA's long position.| EIDESVIK OFFSHORE vs. FIREWEED METALS P | EIDESVIK OFFSHORE vs. STMICROELECTRONICS | EIDESVIK OFFSHORE vs. Transport International Holdings | EIDESVIK OFFSHORE vs. Fortescue Metals Group |
| NVIDIA vs. MELIA HOTELS | NVIDIA vs. INTERCONT HOTELS | NVIDIA vs. Sunstone Hotel Investors | NVIDIA vs. Xenia Hotels Resorts |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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