Correlation Between Eidesvik Offshore and Sterling Construction
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Sterling Construction 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 Sterling Construction 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 Sterling Construction, you can compare the effects of market volatilities on Eidesvik Offshore and Sterling Construction 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 Sterling Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Sterling Construction.
Diversification Opportunities for Eidesvik Offshore and Sterling Construction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eidesvik and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction 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 Sterling Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Construction has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Sterling Construction go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Sterling Construction
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.33 times more return on investment than Sterling Construction. However, Eidesvik Offshore ASA is 3.07 times less risky than Sterling Construction. It trades about -0.09 of its potential returns per unit of risk. Sterling Construction is currently generating about -0.17 per unit of risk. If you would invest 115.00 in Eidesvik Offshore ASA on November 7, 2024 and sell it today you would lose (5.00) from holding Eidesvik Offshore ASA or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Sterling Construction
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Sterling Construction |
Eidesvik Offshore and Sterling Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Sterling Construction
The main advantage of trading using opposite Eidesvik Offshore and Sterling Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Sterling Construction 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 Sterling Construction will offset losses from the drop in Sterling Construction's long position.| Eidesvik Offshore vs. United States Steel | Eidesvik Offshore vs. BRIT AMER TOBACCO | Eidesvik Offshore vs. ELL ENVIRONHLDGS HD 0001 | Eidesvik Offshore vs. Mount Gibson Iron |
| Sterling Construction vs. EMBARK EDUCATION LTD | Sterling Construction vs. Transport International Holdings | Sterling Construction vs. JD SPORTS FASH | Sterling Construction vs. Perdoceo Education |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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