Correlation Between Eidesvik Offshore and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and CeoTronics 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 CeoTronics 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 CeoTronics AG, you can compare the effects of market volatilities on Eidesvik Offshore and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and CeoTronics.
Diversification Opportunities for Eidesvik Offshore and CeoTronics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eidesvik and CeoTronics is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and CeoTronics go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and CeoTronics
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.3 times more return on investment than CeoTronics. However, Eidesvik Offshore is 1.3 times more volatile than CeoTronics AG. It trades about 0.05 of its potential returns per unit of risk. CeoTronics AG is currently generating about 0.04 per unit of risk. If you would invest 65.00 in Eidesvik Offshore ASA on September 3, 2024 and sell it today you would earn a total of 44.00 from holding Eidesvik Offshore ASA or generate 67.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. CeoTronics AG
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| CeoTronics AG |
Eidesvik Offshore and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and CeoTronics
The main advantage of trading using opposite Eidesvik Offshore and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| Eidesvik Offshore vs. SCANDMEDICAL SOLDK 040 | Eidesvik Offshore vs. MEDICAL FACILITIES NEW | Eidesvik Offshore vs. Uber Technologies | Eidesvik Offshore vs. PKSHA TECHNOLOGY INC |
| CeoTronics vs. 24SEVENOFFICE GROUP AB | CeoTronics vs. AUSTEVOLL SEAFOOD | CeoTronics vs. Lery Seafood Group | CeoTronics vs. Mobilezone Holding AG |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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