Correlation Between Eidesvik Offshore and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on Eidesvik Offshore and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Evolution Mining.
Diversification Opportunities for Eidesvik Offshore and Evolution Mining
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eidesvik and Evolution is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Evolution Mining go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Evolution Mining
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Evolution Mining. But the stock apears to be less risky and, when comparing its historical volatility, Eidesvik Offshore ASA is 1.25 times less risky than Evolution Mining. The stock trades about -0.03 of its potential returns per unit of risk. The Evolution Mining Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 382.00 in Evolution Mining Limited on January 18, 2025 and sell it today you would earn a total of 86.00 from holding Evolution Mining Limited or generate 22.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Evolution Mining Limited
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Evolution Mining |
Eidesvik Offshore and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Evolution Mining
The main advantage of trading using opposite Eidesvik Offshore and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| Eidesvik Offshore vs. BioNTech SE | Eidesvik Offshore vs. Genscript Biotech | Eidesvik Offshore vs. Semiconductor Manufacturing International | Eidesvik Offshore vs. Elmos Semiconductor SE |
| Evolution Mining vs. Monster Beverage Corp | Evolution Mining vs. The Boston Beer | Evolution Mining vs. China Resources Beer | Evolution Mining vs. Waste Management |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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