Correlation Between Eidesvik Offshore and ASTRA INTERNATIONAL
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL, you can compare the effects of market volatilities on Eidesvik Offshore and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and ASTRA INTERNATIONAL.
Diversification Opportunities for Eidesvik Offshore and ASTRA INTERNATIONAL
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eidesvik and ASTRA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and ASTRA INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRA INTERNATIONAL has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and ASTRA INTERNATIONAL go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and ASTRA INTERNATIONAL
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 50.6 times less return on investment than ASTRA INTERNATIONAL. But when comparing it to its historical volatility, Eidesvik Offshore ASA is 2.01 times less risky than ASTRA INTERNATIONAL. It trades about 0.01 of its potential returns per unit of risk. ASTRA INTERNATIONAL is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 30.00 in ASTRA INTERNATIONAL on September 13, 2024 and sell it today you would earn a total of 3.00 from holding ASTRA INTERNATIONAL or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. ASTRA INTERNATIONAL
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| ASTRA INTERNATIONAL |
Eidesvik Offshore and ASTRA INTERNATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and ASTRA INTERNATIONAL
The main advantage of trading using opposite Eidesvik Offshore and ASTRA INTERNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL will offset losses from the drop in ASTRA INTERNATIONAL's long position.| Eidesvik Offshore vs. Tenaris SA | Eidesvik Offshore vs. NOV Inc | Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. SIVERS SEMICONDUCTORS AB |
| ASTRA INTERNATIONAL vs. Apple Inc | ASTRA INTERNATIONAL vs. Apple Inc | ASTRA INTERNATIONAL vs. Apple Inc | ASTRA INTERNATIONAL 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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