Correlation Between Eidesvik Offshore and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on Eidesvik Offshore and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and THRACE PLASTICS.
Diversification Opportunities for Eidesvik Offshore and THRACE PLASTICS
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eidesvik and THRACE is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and THRACE PLASTICS
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 1.92 times more return on investment than THRACE PLASTICS. However, Eidesvik Offshore is 1.92 times more volatile than THRACE PLASTICS. It trades about 0.05 of its potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.02 per unit of risk. If you would invest 69.00 in Eidesvik Offshore ASA on September 20, 2024 and sell it today you would earn a total of 42.00 from holding Eidesvik Offshore ASA or generate 60.87% 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. THRACE PLASTICS
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| THRACE PLASTICS |
Eidesvik Offshore and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and THRACE PLASTICS
The main advantage of trading using opposite Eidesvik Offshore and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| Eidesvik Offshore vs. Ryanair Holdings plc | Eidesvik Offshore vs. IMAGIN MEDICAL INC | Eidesvik Offshore vs. Westinghouse Air Brake | Eidesvik Offshore vs. MEDICAL FACILITIES NEW |
| THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Microsoft |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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