Correlation Between EIDESVIK OFFSHORE and X FAB
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and X FAB.
Diversification Opportunities for EIDESVIK OFFSHORE and X FAB
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EIDESVIK and XFB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and X FAB go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and X FAB
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to generate 0.99 times more return on investment than X FAB. However, EIDESVIK OFFSHORE NK is 1.02 times less risky than X FAB. It trades about -0.06 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.16 per unit of risk. If you would invest 121.00 in EIDESVIK OFFSHORE NK on August 28, 2024 and sell it today you would lose (9.00) from holding EIDESVIK OFFSHORE NK or give up 7.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. X FAB Silicon Foundries
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| X FAB Silicon |
EIDESVIK OFFSHORE and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and X FAB
The main advantage of trading using opposite EIDESVIK OFFSHORE and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| EIDESVIK OFFSHORE vs. MOVIE GAMES SA | EIDESVIK OFFSHORE vs. Townsquare Media | EIDESVIK OFFSHORE vs. Flutter Entertainment PLC | EIDESVIK OFFSHORE vs. RCS MediaGroup 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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