Correlation Between Eidesvik Offshore and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and MGIC INVESTMENT 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 MGIC INVESTMENT 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 MGIC INVESTMENT, you can compare the effects of market volatilities on Eidesvik Offshore and MGIC INVESTMENT 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 MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and MGIC INVESTMENT.
Diversification Opportunities for Eidesvik Offshore and MGIC INVESTMENT
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and MGIC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT 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 MGIC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC INVESTMENT has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and MGIC INVESTMENT
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 1.43 times less return on investment than MGIC INVESTMENT. In addition to that, Eidesvik Offshore is 2.82 times more volatile than MGIC INVESTMENT. It trades about 0.05 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.21 per unit of volatility. If you would invest 2,280 in MGIC INVESTMENT on October 24, 2024 and sell it today you would earn a total of 80.00 from holding MGIC INVESTMENT or generate 3.51% 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. MGIC INVESTMENT
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| MGIC INVESTMENT |
Eidesvik Offshore and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and MGIC INVESTMENT
The main advantage of trading using opposite Eidesvik Offshore and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, MGIC INVESTMENT 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 MGIC INVESTMENT will offset losses from the drop in MGIC INVESTMENT's long position.| Eidesvik Offshore vs. REVO INSURANCE SPA | Eidesvik Offshore vs. Virtu Financial | Eidesvik Offshore vs. Direct Line Insurance | Eidesvik Offshore vs. Ameriprise Financial |
| MGIC INVESTMENT vs. Westinghouse Air Brake | MGIC INVESTMENT vs. CompuGroup Medical SE | MGIC INVESTMENT vs. CHINA SOUTHN AIR H | MGIC INVESTMENT vs. Fair Isaac Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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