Correlation Between Eidesvik Offshore and Cleanaway Waste
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Cleanaway Waste 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 Cleanaway Waste 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 Cleanaway Waste Management, you can compare the effects of market volatilities on Eidesvik Offshore and Cleanaway Waste 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 Cleanaway Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Cleanaway Waste.
Diversification Opportunities for Eidesvik Offshore and Cleanaway Waste
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eidesvik and Cleanaway is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Cleanaway Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleanaway Waste Mana 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 Cleanaway Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleanaway Waste Mana has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Cleanaway Waste go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Cleanaway Waste
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Cleanaway Waste. But the stock apears to be less risky and, when comparing its historical volatility, Eidesvik Offshore ASA is 1.15 times less risky than Cleanaway Waste. The stock trades about -0.09 of its potential returns per unit of risk. The Cleanaway Waste Management is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 168.00 in Cleanaway Waste Management on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Cleanaway Waste Management or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Cleanaway Waste Management
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Cleanaway Waste Mana |
Eidesvik Offshore and Cleanaway Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Cleanaway Waste
The main advantage of trading using opposite Eidesvik Offshore and Cleanaway Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Cleanaway Waste 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 Cleanaway Waste will offset losses from the drop in Cleanaway Waste's long position.| Eidesvik Offshore vs. BURLINGTON STORES | Eidesvik Offshore vs. Burlington Stores | Eidesvik Offshore vs. BJs Wholesale Club | Eidesvik Offshore vs. RETAIL FOOD GROUP |
| Cleanaway Waste vs. THAI BEVERAGE | Cleanaway Waste vs. Seven West Media | Cleanaway Waste vs. Austevoll Seafood ASA | Cleanaway Waste vs. GigaMedia |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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