Correlation Between Eidesvik Offshore and Hisense Home
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Hisense Home 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 Hisense Home 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 Hisense Home Appliances, you can compare the effects of market volatilities on Eidesvik Offshore and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Hisense Home.
Diversification Opportunities for Eidesvik Offshore and Hisense Home
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eidesvik and Hisense is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Hisense Home go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Hisense Home
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 4.82 times less return on investment than Hisense Home. But when comparing it to its historical volatility, Eidesvik Offshore ASA is 1.02 times less risky than Hisense Home. It trades about 0.05 of its potential returns per unit of risk. Hisense Home Appliances is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 292.00 in Hisense Home Appliances on October 16, 2024 and sell it today you would earn a total of 34.00 from holding Hisense Home Appliances or generate 11.64% 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. Hisense Home Appliances
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Hisense Home Appliances |
Eidesvik Offshore and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Hisense Home
The main advantage of trading using opposite Eidesvik Offshore and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| Eidesvik Offshore vs. PLAYTIKA HOLDING DL 01 | Eidesvik Offshore vs. ELMOS SEMICONDUCTOR | Eidesvik Offshore vs. MagnaChip Semiconductor Corp | Eidesvik Offshore vs. PLAYMATES TOYS |
| Hisense Home vs. Performance Food Group | Hisense Home vs. CEOTRONICS | Hisense Home vs. United Natural Foods | Hisense Home vs. SENECA FOODS A |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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