Correlation Between Eidesvik Offshore and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Amkor Technology 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 Amkor Technology 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 Amkor Technology, you can compare the effects of market volatilities on Eidesvik Offshore and Amkor Technology 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 Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Amkor Technology.
Diversification Opportunities for Eidesvik Offshore and Amkor Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eidesvik and Amkor is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology 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 Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Amkor Technology go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Amkor Technology
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.96 times more return on investment than Amkor Technology. However, Eidesvik Offshore ASA is 1.04 times less risky than Amkor Technology. It trades about 0.05 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.02 per unit of risk. If you would invest 64.00 in Eidesvik Offshore ASA on August 31, 2024 and sell it today you would earn a total of 46.00 from holding Eidesvik Offshore ASA or generate 71.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Amkor Technology
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Amkor Technology |
Eidesvik Offshore and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Amkor Technology
The main advantage of trading using opposite Eidesvik Offshore and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.| Eidesvik Offshore vs. Playtech plc | Eidesvik Offshore vs. UET United Electronic | Eidesvik Offshore vs. GigaMedia | Eidesvik Offshore vs. Beijing Media |
| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Advanced Micro Devices | Amkor Technology vs. Intel |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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