Correlation Between EnBW Energie and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both EnBW Energie and EIDESVIK OFFSHORE 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 EnBW Energie and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EnBW Energie Baden Wrttemberg and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on EnBW Energie and EIDESVIK OFFSHORE 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 EnBW Energie with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnBW Energie and EIDESVIK OFFSHORE.
Diversification Opportunities for EnBW Energie and EIDESVIK OFFSHORE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EnBW and EIDESVIK is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding EnBW Energie Baden Wrttemberg and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and EnBW Energie 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 EnBW Energie Baden Wrttemberg are associated (or correlated) with EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of EnBW Energie i.e., EnBW Energie and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between EnBW Energie and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon EnBW Energie Baden Wrttemberg is expected to under-perform the EIDESVIK OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, EnBW Energie Baden Wrttemberg is 1.52 times less risky than EIDESVIK OFFSHORE. The stock trades about -0.02 of its potential returns per unit of risk. The EIDESVIK OFFSHORE NK is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 62.00 in EIDESVIK OFFSHORE NK on September 4, 2024 and sell it today you would earn a total of 48.00 from holding EIDESVIK OFFSHORE NK or generate 77.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.42% |
| Values | Daily Returns |
EnBW Energie Baden Wrttemberg vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| EnBW Energie Baden |
| EIDESVIK OFFSHORE |
EnBW Energie and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnBW Energie and EIDESVIK OFFSHORE
The main advantage of trading using opposite EnBW Energie and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnBW Energie position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| EnBW Energie vs. PRECISION DRILLING P | EnBW Energie vs. Salesforce | EnBW Energie vs. Canon Marketing Japan | EnBW Energie vs. CARSALESCOM |
| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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