Correlation Between Eidesvik Offshore and ADS Maritime
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and ADS Maritime 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 ADS Maritime 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 ADS Maritime Holding, you can compare the effects of market volatilities on Eidesvik Offshore and ADS Maritime 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 ADS Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and ADS Maritime.
Diversification Opportunities for Eidesvik Offshore and ADS Maritime
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eidesvik and ADS is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and ADS Maritime Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS Maritime Holding 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 ADS Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS Maritime Holding has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and ADS Maritime go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and ADS Maritime
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.95 times more return on investment than ADS Maritime. However, Eidesvik Offshore ASA is 1.05 times less risky than ADS Maritime. It trades about 0.05 of its potential returns per unit of risk. ADS Maritime Holding is currently generating about 0.01 per unit of risk. If you would invest 858.00 in Eidesvik Offshore ASA on September 3, 2024 and sell it today you would earn a total of 464.00 from holding Eidesvik Offshore ASA or generate 54.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. ADS Maritime Holding
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| ADS Maritime Holding |
Eidesvik Offshore and ADS Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and ADS Maritime
The main advantage of trading using opposite Eidesvik Offshore and ADS Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, ADS Maritime 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 ADS Maritime will offset losses from the drop in ADS Maritime's long position.| Eidesvik Offshore vs. BW Energy | Eidesvik Offshore vs. Subsea 7 SA | Eidesvik Offshore vs. BW LPG | Eidesvik Offshore vs. Dno ASA |
| ADS Maritime vs. Havila Shipping ASA | ADS Maritime vs. Shelf Drilling | ADS Maritime vs. Solstad Offsho | ADS Maritime vs. Eidesvik Offshore ASA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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