Correlation Between Eidesvik Offshore and United Rentals
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and United Rentals 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 United Rentals 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 United Rentals, you can compare the effects of market volatilities on Eidesvik Offshore and United Rentals 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 United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and United Rentals.
Diversification Opportunities for Eidesvik Offshore and United Rentals
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and United is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals 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 United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and United Rentals go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and United Rentals
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 1.05 times less return on investment than United Rentals. In addition to that, Eidesvik Offshore is 1.17 times more volatile than United Rentals. It trades about 0.04 of its total potential returns per unit of risk. United Rentals is currently generating about 0.05 per unit of volatility. If you would invest 60,084 in United Rentals on November 4, 2024 and sell it today you would earn a total of 15,196 from holding United Rentals or generate 25.29% 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. United Rentals
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| United Rentals |
Eidesvik Offshore and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and United Rentals
The main advantage of trading using opposite Eidesvik Offshore and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| Eidesvik Offshore vs. Schlumberger Limited | Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Tenaris SA | Eidesvik Offshore vs. China Oilfield Services |
| United Rentals vs. OPKO HEALTH | United Rentals vs. Sims Metal Management | United Rentals vs. Tencent Music Entertainment | United Rentals vs. Molina Healthcare |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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