Correlation Between Eidesvik Offshore and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners, you can compare the effects of market volatilities on Eidesvik Offshore and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Virtus Investment.
Diversification Opportunities for Eidesvik Offshore and Virtus Investment
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eidesvik and Virtus is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Virtus Investment go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Virtus Investment
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Virtus Investment. But the stock apears to be less risky and, when comparing its historical volatility, Eidesvik Offshore ASA is 1.51 times less risky than Virtus Investment. The stock trades about -0.09 of its potential returns per unit of risk. The Virtus Investment Partners is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 20,200 in Virtus Investment Partners on September 1, 2024 and sell it today you would earn a total of 3,200 from holding Virtus Investment Partners or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Virtus Investment Partners
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Virtus Investment |
Eidesvik Offshore and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Virtus Investment
The main advantage of trading using opposite Eidesvik Offshore and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment'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 |
| Virtus Investment vs. MTI WIRELESS EDGE | Virtus Investment vs. REGAL ASIAN INVESTMENTS | Virtus Investment vs. SLR Investment Corp | Virtus Investment vs. AOYAMA TRADING |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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