Correlation Between Eidesvik Offshore and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and COVIVIO HOTELS 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 COVIVIO HOTELS 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 COVIVIO HOTELS INH, you can compare the effects of market volatilities on Eidesvik Offshore and COVIVIO HOTELS 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 COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and COVIVIO HOTELS.
Diversification Opportunities for Eidesvik Offshore and COVIVIO HOTELS
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and COVIVIO is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and COVIVIO HOTELS
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.83 times more return on investment than COVIVIO HOTELS. However, Eidesvik Offshore is 1.83 times more volatile than COVIVIO HOTELS INH. It trades about 0.05 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.04 per unit of risk. If you would invest 76.00 in Eidesvik Offshore ASA on August 31, 2024 and sell it today you would earn a total of 33.00 from holding Eidesvik Offshore ASA or generate 43.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| COVIVIO HOTELS INH |
Eidesvik Offshore and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and COVIVIO HOTELS
The main advantage of trading using opposite Eidesvik Offshore and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| Eidesvik Offshore vs. Playtech plc | Eidesvik Offshore vs. UET United Electronic | Eidesvik Offshore vs. GigaMedia | Eidesvik Offshore vs. Beijing Media |
| COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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