Correlation Between Eidesvik Offshore and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising, you can compare the effects of market volatilities on Eidesvik Offshore and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Lamar Advertising.
Diversification Opportunities for Eidesvik Offshore and Lamar Advertising
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eidesvik and Lamar is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Lamar Advertising go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Lamar Advertising
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.83 times more return on investment than Lamar Advertising. However, Eidesvik Offshore ASA is 1.2 times less risky than Lamar Advertising. It trades about -0.13 of its potential returns per unit of risk. Lamar Advertising is currently generating about -0.17 per unit of risk. If you would invest 112.00 in Eidesvik Offshore ASA on September 26, 2024 and sell it today you would lose (4.00) from holding Eidesvik Offshore ASA or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Lamar Advertising
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Lamar Advertising |
Eidesvik Offshore and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Lamar Advertising
The main advantage of trading using opposite Eidesvik Offshore and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Baker Hughes Co | Eidesvik Offshore vs. Tenaris SA |
| Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |