Correlation Between Eidesvik Offshore and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Atrium Ljungberg 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 Atrium Ljungberg 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 Atrium Ljungberg AB, you can compare the effects of market volatilities on Eidesvik Offshore and Atrium Ljungberg 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 Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Atrium Ljungberg.
Diversification Opportunities for Eidesvik Offshore and Atrium Ljungberg
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eidesvik and Atrium is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg 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 Atrium Ljungberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Ljungberg has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Atrium Ljungberg
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.27 times more return on investment than Atrium Ljungberg. However, Eidesvik Offshore is 1.27 times more volatile than Atrium Ljungberg AB. It trades about 0.04 of its potential returns per unit of risk. Atrium Ljungberg AB is currently generating about 0.05 per unit of risk. If you would invest 76.00 in Eidesvik Offshore ASA on October 14, 2024 and sell it today you would earn a total of 41.00 from holding Eidesvik Offshore ASA or generate 53.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Atrium Ljungberg AB
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Atrium Ljungberg |
Eidesvik Offshore and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Atrium Ljungberg
The main advantage of trading using opposite Eidesvik Offshore and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Atrium Ljungberg 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 Atrium Ljungberg will offset losses from the drop in Atrium Ljungberg's long position.| Eidesvik Offshore vs. PLAYMATES TOYS | Eidesvik Offshore vs. PEPTONIC MEDICAL | Eidesvik Offshore vs. SPECTRAL MEDICAL | Eidesvik Offshore vs. Compugroup Medical SE |
| Atrium Ljungberg vs. Eidesvik Offshore ASA | Atrium Ljungberg vs. BW OFFSHORE LTD | Atrium Ljungberg vs. PT Wintermar Offshore | Atrium Ljungberg vs. Nexstar Media Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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