Correlation Between EIDESVIK OFFSHORE and United Overseas
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and United Overseas 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 United Overseas 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 United Overseas Bank, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and United Overseas.
Diversification Opportunities for EIDESVIK OFFSHORE and United Overseas
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EIDESVIK and United is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and United Overseas go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and United Overseas
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to under-perform the United Overseas. In addition to that, EIDESVIK OFFSHORE is 1.88 times more volatile than United Overseas Bank. It trades about -0.05 of its total potential returns per unit of risk. United Overseas Bank is currently generating about 0.19 per unit of volatility. If you would invest 1,964 in United Overseas Bank on November 3, 2024 and sell it today you would earn a total of 711.00 from holding United Overseas Bank or generate 36.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. United Overseas Bank
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| United Overseas Bank |
EIDESVIK OFFSHORE and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and United Overseas
The main advantage of trading using opposite EIDESVIK OFFSHORE and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.| EIDESVIK OFFSHORE vs. SIVERS SEMICONDUCTORS AB | EIDESVIK OFFSHORE vs. NorAm Drilling AS | EIDESVIK OFFSHORE vs. Volkswagen AG | EIDESVIK OFFSHORE vs. Darden Restaurants |
| United Overseas vs. Fast Retailing Co | United Overseas vs. Caseys General Stores | United Overseas vs. Iridium Communications | United Overseas vs. Cairo Communication SpA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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