Correlation Between Eidesvik Offshore and AGF Management
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and AGF Management 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 AGF Management 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 AGF Management Limited, you can compare the effects of market volatilities on Eidesvik Offshore and AGF Management 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 AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and AGF Management.
Diversification Opportunities for Eidesvik Offshore and AGF Management
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and AGF is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management 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 AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and AGF Management go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and AGF Management
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 1.57 times less return on investment than AGF Management. In addition to that, Eidesvik Offshore is 1.12 times more volatile than AGF Management Limited. It trades about 0.03 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.06 per unit of volatility. If you would invest 684.00 in AGF Management Limited on November 6, 2024 and sell it today you would earn a total of 36.00 from holding AGF Management Limited or generate 5.26% 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. AGF Management Limited
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| AGF Management |
Eidesvik Offshore and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and AGF Management
The main advantage of trading using opposite Eidesvik Offshore and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, AGF Management 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 AGF Management will offset losses from the drop in AGF Management's long position.| Eidesvik Offshore vs. United States Steel | Eidesvik Offshore vs. BRIT AMER TOBACCO | Eidesvik Offshore vs. ELL ENVIRONHLDGS HD 0001 | Eidesvik Offshore vs. Mount Gibson Iron |
| AGF Management vs. Yuexiu Transport Infrastructure | AGF Management vs. Solstad Offshore ASA | AGF Management vs. Transport International Holdings | AGF Management vs. East Africa Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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