Correlation Between Eidesvik Offshore and National Health
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and National Health 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 National Health 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 National Health Investors, you can compare the effects of market volatilities on Eidesvik Offshore and National Health 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and National Health.
Diversification Opportunities for Eidesvik Offshore and National Health
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eidesvik and National is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and National Health go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and National Health
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 5.82 times less return on investment than National Health. But when comparing it to its historical volatility, Eidesvik Offshore ASA is 1.82 times less risky than National Health. It trades about 0.04 of its potential returns per unit of risk. National Health Investors is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,850 in National Health Investors on September 4, 2024 and sell it today you would earn a total of 400.00 from holding National Health Investors or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. National Health Investors
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| National Health Investors |
Eidesvik Offshore and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and National Health
The main advantage of trading using opposite Eidesvik Offshore and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. NMI Holdings | Eidesvik Offshore vs. Origin Agritech |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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