Correlation Between Eidesvik Offshore and CHINA SOUTHN
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and CHINA SOUTHN 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 CHINA SOUTHN 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 CHINA SOUTHN AIR H , you can compare the effects of market volatilities on Eidesvik Offshore and CHINA SOUTHN 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 CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and CHINA SOUTHN.
Diversification Opportunities for Eidesvik Offshore and CHINA SOUTHN
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eidesvik and CHINA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR 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 CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and CHINA SOUTHN go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and CHINA SOUTHN
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the CHINA SOUTHN. But the stock apears to be less risky and, when comparing its historical volatility, Eidesvik Offshore ASA is 1.43 times less risky than CHINA SOUTHN. The stock trades about -0.09 of its potential returns per unit of risk. The CHINA SOUTHN AIR H is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 47.00 in CHINA SOUTHN AIR H on November 7, 2024 and sell it today you would lose (2.00) from holding CHINA SOUTHN AIR H or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. CHINA SOUTHN AIR H
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| CHINA SOUTHN AIR |
Eidesvik Offshore and CHINA SOUTHN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and CHINA SOUTHN
The main advantage of trading using opposite Eidesvik Offshore and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, CHINA SOUTHN 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 CHINA SOUTHN will offset losses from the drop in CHINA SOUTHN's long position.| Eidesvik Offshore vs. Cars Inc | Eidesvik Offshore vs. Norwegian Air Shuttle | Eidesvik Offshore vs. CHINA SOUTHN AIR H | Eidesvik Offshore vs. COMMERCIAL VEHICLE |
| CHINA SOUTHN vs. Mitsui Chemicals | CHINA SOUTHN vs. KIMBALL ELECTRONICS | CHINA SOUTHN vs. Methode Electronics | CHINA SOUTHN vs. STMicroelectronics NV |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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