Correlation Between Eidesvik Offshore and AGNC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and AGNC INVESTMENT 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 AGNC INVESTMENT 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 AGNC INVESTMENT, you can compare the effects of market volatilities on Eidesvik Offshore and AGNC INVESTMENT 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 AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and AGNC INVESTMENT.
Diversification Opportunities for Eidesvik Offshore and AGNC INVESTMENT
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eidesvik and AGNC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT 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 AGNC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC INVESTMENT has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and AGNC INVESTMENT go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and AGNC INVESTMENT
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 2.35 times more return on investment than AGNC INVESTMENT. However, Eidesvik Offshore is 2.35 times more volatile than AGNC INVESTMENT. It trades about 0.04 of its potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.09 per unit of risk. If you would invest 91.00 in Eidesvik Offshore ASA on November 4, 2024 and sell it today you would earn a total of 19.00 from holding Eidesvik Offshore ASA or generate 20.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. AGNC INVESTMENT
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| AGNC INVESTMENT |
Eidesvik Offshore and AGNC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and AGNC INVESTMENT
The main advantage of trading using opposite Eidesvik Offshore and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, AGNC INVESTMENT 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 AGNC INVESTMENT will offset losses from the drop in AGNC INVESTMENT's long position.| Eidesvik Offshore vs. Schlumberger Limited | Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Tenaris SA | Eidesvik Offshore vs. China Oilfield Services |
| AGNC INVESTMENT vs. PLAYMATES TOYS | AGNC INVESTMENT vs. BAKED GAMES SA | AGNC INVESTMENT vs. International Game Technology | AGNC INVESTMENT vs. CONTAGIOUS GAMING INC |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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