Correlation Between Eidesvik Offshore and Gold Road
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on Eidesvik Offshore and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Gold Road.
Diversification Opportunities for Eidesvik Offshore and Gold Road
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and Gold is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Gold Road go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Gold Road
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 34.95 times less return on investment than Gold Road. In addition to that, Eidesvik Offshore is 2.39 times more volatile than Gold Road Resources. It trades about 0.01 of its total potential returns per unit of risk. Gold Road Resources is currently generating about 1.04 per unit of volatility. If you would invest 119.00 in Gold Road Resources on October 27, 2024 and sell it today you would earn a total of 29.00 from holding Gold Road Resources or generate 24.37% 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. Gold Road Resources
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Gold Road Resources |
Eidesvik Offshore and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Gold Road
The main advantage of trading using opposite Eidesvik Offshore and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| Eidesvik Offshore vs. Stag Industrial | Eidesvik Offshore vs. Silicon Motion Technology | Eidesvik Offshore vs. Zijin Mining Group | Eidesvik Offshore vs. TIANDE CHEMICAL |
| Gold Road vs. Gaztransport Technigaz SA | Gold Road vs. Fevertree Drinks PLC | Gold Road vs. Thai Beverage Public | Gold Road vs. Broadridge Financial Solutions |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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