Correlation Between Eidesvik Offshore and NEWELL RUBBERMAID
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID 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 NEWELL RUBBERMAID , you can compare the effects of market volatilities on Eidesvik Offshore and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and NEWELL RUBBERMAID.
Diversification Opportunities for Eidesvik Offshore and NEWELL RUBBERMAID
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eidesvik and NEWELL is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and NEWELL RUBBERMAID go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and NEWELL RUBBERMAID
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the NEWELL RUBBERMAID. But the stock apears to be less risky and, when comparing its historical volatility, Eidesvik Offshore ASA is 2.81 times less risky than NEWELL RUBBERMAID. The stock trades about -0.13 of its potential returns per unit of risk. The NEWELL RUBBERMAID is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 864.00 in NEWELL RUBBERMAID on September 24, 2024 and sell it today you would earn a total of 83.00 from holding NEWELL RUBBERMAID or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. NEWELL RUBBERMAID
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| NEWELL RUBBERMAID |
Eidesvik Offshore and NEWELL RUBBERMAID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and NEWELL RUBBERMAID
The main advantage of trading using opposite Eidesvik Offshore and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, NEWELL RUBBERMAID 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 NEWELL RUBBERMAID will offset losses from the drop in NEWELL RUBBERMAID's long position.| Eidesvik Offshore vs. Schlumberger Limited | Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Baker Hughes Co |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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