Correlation Between Eidesvik Offshore and KB HOME
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and KB 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 KB 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 KB HOME, you can compare the effects of market volatilities on Eidesvik Offshore and KB 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 KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and KB HOME.
Diversification Opportunities for Eidesvik Offshore and KB HOME
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and KBH is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME 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 KB HOME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB HOME has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and KB HOME go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and KB HOME
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the KB HOME. In addition to that, Eidesvik Offshore is 1.06 times more volatile than KB HOME. It trades about -0.14 of its total potential returns per unit of risk. KB HOME is currently generating about 0.06 per unit of volatility. If you would invest 7,250 in KB HOME on September 4, 2024 and sell it today you would earn a total of 650.00 from holding KB HOME or generate 8.97% 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. KB HOME
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| KB HOME |
Eidesvik Offshore and KB HOME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and KB HOME
The main advantage of trading using opposite Eidesvik Offshore and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, KB 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 KB HOME will offset losses from the drop in KB HOME's long position.| Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. NMI Holdings | Eidesvik Offshore vs. Origin Agritech |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |