Correlation Between Eidesvik Offshore and Arcticzymes Technologies
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Arcticzymes Technologies 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 Arcticzymes Technologies 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 Arcticzymes Technologies ASA, you can compare the effects of market volatilities on Eidesvik Offshore and Arcticzymes Technologies 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 Arcticzymes Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Arcticzymes Technologies.
Diversification Opportunities for Eidesvik Offshore and Arcticzymes Technologies
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eidesvik and Arcticzymes is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes Technologies 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 Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Arcticzymes Technologies go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Arcticzymes Technologies
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.5 times more return on investment than Arcticzymes Technologies. However, Eidesvik Offshore ASA is 2.02 times less risky than Arcticzymes Technologies. It trades about -0.01 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about -0.25 per unit of risk. If you would invest 1,364 in Eidesvik Offshore ASA on August 29, 2024 and sell it today you would lose (14.00) from holding Eidesvik Offshore ASA or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Arcticzymes Technologies ASA
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Arcticzymes Technologies |
Eidesvik Offshore and Arcticzymes Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Arcticzymes Technologies
The main advantage of trading using opposite Eidesvik Offshore and Arcticzymes Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Arcticzymes Technologies 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 Arcticzymes Technologies will offset losses from the drop in Arcticzymes Technologies' long position.| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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