Correlation Between Eidesvik Offshore and Amazon
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on Eidesvik Offshore and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Amazon.
Diversification Opportunities for Eidesvik Offshore and Amazon
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and Amazon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Amazon go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Amazon
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Amazon. In addition to that, Eidesvik Offshore is 1.46 times more volatile than Amazon Inc. It trades about -0.03 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.18 per unit of volatility. If you would invest 21,730 in Amazon Inc on November 4, 2024 and sell it today you would earn a total of 1,225 from holding Amazon Inc or generate 5.64% 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. Amazon Inc
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Amazon Inc |
Eidesvik Offshore and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Amazon
The main advantage of trading using opposite Eidesvik Offshore and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Eidesvik Offshore vs. MCEWEN MINING INC | Eidesvik Offshore vs. GREENX METALS LTD | Eidesvik Offshore vs. MAGNUM MINING EXP | Eidesvik Offshore vs. Endeavour Mining PLC |
| Amazon vs. ADDUS HOMECARE | Amazon vs. HAVERTY FURNITURE A | Amazon vs. KENEDIX OFFICE INV | Amazon vs. DFS Furniture PLC |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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