Correlation Between Eidesvik Offshore and Nucor
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Nucor 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 Nucor 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 Nucor, you can compare the effects of market volatilities on Eidesvik Offshore and Nucor 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 Nucor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Nucor.
Diversification Opportunities for Eidesvik Offshore and Nucor
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eidesvik and Nucor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor 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 Nucor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Nucor go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Nucor
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.92 times more return on investment than Nucor. However, Eidesvik Offshore ASA is 1.09 times less risky than Nucor. It trades about -0.01 of its potential returns per unit of risk. Nucor is currently generating about -0.21 per unit of risk. If you would invest 97.00 in Eidesvik Offshore ASA on January 16, 2025 and sell it today you would lose (2.00) from holding Eidesvik Offshore ASA or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Nucor
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Nucor |
Eidesvik Offshore and Nucor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Nucor
The main advantage of trading using opposite Eidesvik Offshore and Nucor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Nucor 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 Nucor will offset losses from the drop in Nucor's long position.| Eidesvik Offshore vs. Martin Marietta Materials | Eidesvik Offshore vs. Magnachip Semiconductor | Eidesvik Offshore vs. ScanSource | Eidesvik Offshore vs. Eagle Materials |
| Nucor vs. Gaztransport Technigaz SA | Nucor vs. Nippon Steel | Nucor vs. TOMBADOR IRON LTD | Nucor vs. COLUMBIA SPORTSWEAR |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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