Correlation Between Eidesvik Offshore and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and PPG Industries 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 PPG Industries 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 PPG Industries, you can compare the effects of market volatilities on Eidesvik Offshore and PPG Industries 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 PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and PPG Industries.
Diversification Opportunities for Eidesvik Offshore and PPG Industries
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and PPG is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries 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 PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and PPG Industries go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and PPG Industries
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 4.27 times less return on investment than PPG Industries. In addition to that, Eidesvik Offshore is 2.14 times more volatile than PPG Industries. It trades about 0.01 of its total potential returns per unit of risk. PPG Industries is currently generating about 0.12 per unit of volatility. If you would invest 11,430 in PPG Industries on October 25, 2024 and sell it today you would earn a total of 280.00 from holding PPG Industries or generate 2.45% 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. PPG Industries
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| PPG Industries |
Eidesvik Offshore and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and PPG Industries
The main advantage of trading using opposite Eidesvik Offshore and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.| Eidesvik Offshore vs. CarsalesCom | Eidesvik Offshore vs. ZhongAn Online P | Eidesvik Offshore vs. Lamar Advertising | Eidesvik Offshore vs. PROSIEBENSAT1 MEDIADR4 |
| PPG Industries vs. PEPTONIC MEDICAL | PPG Industries vs. LANDSEA GREEN MANAGEMENT | PPG Industries vs. Corporate Travel Management | PPG Industries vs. Japan Medical Dynamic |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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