Correlation Between Eidesvik Offshore and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and VARIOUS EATERIES 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS, you can compare the effects of market volatilities on Eidesvik Offshore and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and VARIOUS EATERIES.
Diversification Opportunities for Eidesvik Offshore and VARIOUS EATERIES
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eidesvik and VARIOUS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and VARIOUS EATERIES
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.6 times more return on investment than VARIOUS EATERIES. However, Eidesvik Offshore is 1.6 times more volatile than VARIOUS EATERIES LS. It trades about 0.17 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.35 per unit of risk. If you would invest 109.00 in Eidesvik Offshore ASA on October 14, 2024 and sell it today you would earn a total of 8.00 from holding Eidesvik Offshore ASA or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| VARIOUS EATERIES |
Eidesvik Offshore and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and VARIOUS EATERIES
The main advantage of trading using opposite Eidesvik Offshore and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| Eidesvik Offshore vs. PLAYMATES TOYS | Eidesvik Offshore vs. PEPTONIC MEDICAL | Eidesvik Offshore vs. SPECTRAL MEDICAL | Eidesvik Offshore vs. Compugroup Medical SE |
| VARIOUS EATERIES vs. SIEM OFFSHORE NEW | VARIOUS EATERIES vs. Eidesvik Offshore ASA | VARIOUS EATERIES vs. Clean Energy Fuels | VARIOUS EATERIES vs. Taiwan Semiconductor Manufacturing |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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