Correlation Between Eidesvik Offshore and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and TRAINLINE PLC 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 TRAINLINE PLC 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 TRAINLINE PLC LS, you can compare the effects of market volatilities on Eidesvik Offshore and TRAINLINE PLC 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 TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and TRAINLINE PLC.
Diversification Opportunities for Eidesvik Offshore and TRAINLINE PLC
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eidesvik and TRAINLINE is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS 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 TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and TRAINLINE PLC
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.21 times more return on investment than TRAINLINE PLC. However, Eidesvik Offshore is 1.21 times more volatile than TRAINLINE PLC LS. It trades about 0.01 of its potential returns per unit of risk. TRAINLINE PLC LS is currently generating about -0.07 per unit of risk. If you would invest 110.00 in Eidesvik Offshore ASA on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Eidesvik Offshore ASA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. TRAINLINE PLC LS
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| TRAINLINE PLC LS |
Eidesvik Offshore and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and TRAINLINE PLC
The main advantage of trading using opposite Eidesvik Offshore and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.| Eidesvik Offshore vs. NH HOTEL GROUP | Eidesvik Offshore vs. Wyndham Hotels Resorts | Eidesvik Offshore vs. Xenia Hotels Resorts | Eidesvik Offshore vs. Perseus Mining Limited |
| TRAINLINE PLC vs. Broadcom | TRAINLINE PLC vs. Gruppo Mutuionline SpA | TRAINLINE PLC vs. YATRA ONLINE DL 0001 | TRAINLINE PLC vs. Liberty Broadband |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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