Correlation Between Eidesvik Offshore and Akastor ASA
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Akastor ASA 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 Akastor ASA 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 Akastor ASA, you can compare the effects of market volatilities on Eidesvik Offshore and Akastor ASA 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 Akastor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Akastor ASA.
Diversification Opportunities for Eidesvik Offshore and Akastor ASA
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eidesvik and Akastor is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Akastor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akastor ASA 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 Akastor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akastor ASA has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Akastor ASA go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Akastor ASA
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Akastor ASA. In addition to that, Eidesvik Offshore is 1.01 times more volatile than Akastor ASA. It trades about -0.07 of its total potential returns per unit of risk. Akastor ASA is currently generating about 0.0 per unit of volatility. If you would invest 1,298 in Akastor ASA on November 30, 2024 and sell it today you would lose (6.00) from holding Akastor ASA or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Akastor ASA
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Akastor ASA |
Eidesvik Offshore and Akastor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Akastor ASA
The main advantage of trading using opposite Eidesvik Offshore and Akastor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Akastor ASA 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 Akastor ASA will offset losses from the drop in Akastor ASA's long position.| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
| Akastor ASA vs. Aker Solutions ASA | Akastor ASA vs. Aker BP ASA | Akastor ASA vs. Odfjell Drilling | Akastor ASA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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