Correlation Between Eidesvik Offshore and M/I Homes
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and M/I Homes 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 M/I Homes 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 MI Homes, you can compare the effects of market volatilities on Eidesvik Offshore and M/I Homes 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 M/I Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and M/I Homes.
Diversification Opportunities for Eidesvik Offshore and M/I Homes
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eidesvik and M/I is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M/I Homes 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 M/I Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M/I Homes has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and M/I Homes go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and M/I Homes
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the M/I Homes. But the stock apears to be less risky and, when comparing its historical volatility, Eidesvik Offshore ASA is 1.76 times less risky than M/I Homes. The stock trades about -0.19 of its potential returns per unit of risk. The MI Homes is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 14,535 in MI Homes on September 20, 2024 and sell it today you would lose (255.00) from holding MI Homes or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. MI Homes
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| M/I Homes |
Eidesvik Offshore and M/I Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and M/I Homes
The main advantage of trading using opposite Eidesvik Offshore and M/I Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, M/I Homes 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 M/I Homes will offset losses from the drop in M/I Homes' long position.| Eidesvik Offshore vs. Ryanair Holdings plc | Eidesvik Offshore vs. IMAGIN MEDICAL INC | Eidesvik Offshore vs. Westinghouse Air Brake | Eidesvik Offshore vs. MEDICAL FACILITIES NEW |
| M/I Homes vs. Iridium Communications | M/I Homes vs. SBM OFFSHORE | M/I Homes vs. UNIVMUSIC GRPADR050 | M/I Homes vs. Cogent Communications Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |