Correlation Between Eidesvik Offshore and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Hyatt Hotels 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 Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eidesvik Offshore ASA and Hyatt Hotels, you can compare the effects of market volatilities on Eidesvik Offshore and Hyatt Hotels 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 Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Hyatt Hotels.
Diversification Opportunities for Eidesvik Offshore and Hyatt Hotels
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and Hyatt is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels 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 ASA are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Hyatt Hotels
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 69.95 times less return on investment than Hyatt Hotels. In addition to that, Eidesvik Offshore is 1.39 times more volatile than Hyatt Hotels. It trades about 0.0 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.1 per unit of volatility. If you would invest 14,190 in Hyatt Hotels on November 7, 2024 and sell it today you would earn a total of 1,075 from holding Hyatt Hotels or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Hyatt Hotels
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Hyatt Hotels |
Eidesvik Offshore and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Hyatt Hotels
The main advantage of trading using opposite Eidesvik Offshore and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Eidesvik Offshore vs. United States Steel | Eidesvik Offshore vs. BRIT AMER TOBACCO | Eidesvik Offshore vs. ELL ENVIRONHLDGS HD 0001 | Eidesvik Offshore vs. Mount Gibson Iron |
| Hyatt Hotels vs. ADRIATIC METALS LS 013355 | Hyatt Hotels vs. Cairo Communication SpA | Hyatt Hotels vs. Geely Automobile Holdings | Hyatt Hotels vs. SIERRA METALS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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