Correlation Between Eidesvik Offshore and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Eidesvik Offshore and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Coca Cola.
Diversification Opportunities for Eidesvik Offshore and Coca Cola
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eidesvik and Coca is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Coca Cola go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Coca Cola
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 3.35 times more return on investment than Coca Cola. However, Eidesvik Offshore is 3.35 times more volatile than The Coca Cola. It trades about 0.04 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.07 per unit of risk. If you would invest 92.00 in Eidesvik Offshore ASA on September 4, 2024 and sell it today you would earn a total of 18.00 from holding Eidesvik Offshore ASA or generate 19.57% 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. The Coca Cola
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Coca Cola |
Eidesvik Offshore and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Coca Cola
The main advantage of trading using opposite Eidesvik Offshore and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. NMI Holdings | Eidesvik Offshore vs. Origin Agritech | Eidesvik Offshore vs. SIVERS SEMICONDUCTORS AB |
| Coca Cola vs. Steel Dynamics | Coca Cola vs. Eidesvik Offshore ASA | Coca Cola vs. COSMOSTEEL HLDGS | Coca Cola vs. American Eagle Outfitters |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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