Correlation Between Eidesvik Offshore and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Wenzhou Kangning 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 Wenzhou Kangning 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 Wenzhou Kangning Hospital, you can compare the effects of market volatilities on Eidesvik Offshore and Wenzhou Kangning 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 Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Wenzhou Kangning.
Diversification Opportunities for Eidesvik Offshore and Wenzhou Kangning
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and Wenzhou is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital 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 Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Wenzhou Kangning
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 1.32 times less return on investment than Wenzhou Kangning. In addition to that, Eidesvik Offshore is 1.04 times more volatile than Wenzhou Kangning Hospital. It trades about 0.03 of its total potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about 0.05 per unit of volatility. If you would invest 83.00 in Wenzhou Kangning Hospital on October 26, 2024 and sell it today you would earn a total of 52.00 from holding Wenzhou Kangning Hospital or generate 62.65% 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. Wenzhou Kangning Hospital
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Wenzhou Kangning Hospital |
Eidesvik Offshore and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Wenzhou Kangning
The main advantage of trading using opposite Eidesvik Offshore and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| Eidesvik Offshore vs. CREO MEDICAL GRP | Eidesvik Offshore vs. BJs Wholesale Club | Eidesvik Offshore vs. H2O Retailing | Eidesvik Offshore vs. BRIT AMER TOBACCO |
| Wenzhou Kangning vs. STGEORGE MINING LTD | Wenzhou Kangning vs. Teradata Corp | Wenzhou Kangning vs. Aya Gold Silver | Wenzhou Kangning vs. NTT DATA |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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