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, 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
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EIDESVIK and XFB is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and X Fab Silicon 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 1.3 times more return on investment than X Fab. However, EIDESVIK OFFSHORE is 1.3 times more volatile than X Fab Silicon. It trades about 0.04 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.02 per unit of risk. If you would invest 70.00 in EIDESVIK OFFSHORE NK on September 7, 2024 and sell it today you would earn a total of 41.00 from holding EIDESVIK OFFSHORE NK or generate 58.57% return on investment 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
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. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
X Fab vs. ELECTRONIC ARTS | X Fab vs. Meiko Electronics Co | X Fab vs. Platinum Investment Management | X Fab vs. STMicroelectronics NV |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |