Correlation Between Eidesvik Offshore and Goodtech
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Goodtech 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 Goodtech 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 Goodtech, you can compare the effects of market volatilities on Eidesvik Offshore and Goodtech 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 Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Goodtech.
Diversification Opportunities for Eidesvik Offshore and Goodtech
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eidesvik and Goodtech is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech 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 Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Goodtech go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Goodtech
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.87 times more return on investment than Goodtech. However, Eidesvik Offshore ASA is 1.15 times less risky than Goodtech. It trades about 0.03 of its potential returns per unit of risk. Goodtech is currently generating about 0.01 per unit of risk. If you would invest 1,194 in Eidesvik Offshore ASA on August 26, 2024 and sell it today you would earn a total of 160.00 from holding Eidesvik Offshore ASA or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Goodtech
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Goodtech |
Eidesvik Offshore and Goodtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Goodtech
The main advantage of trading using opposite Eidesvik Offshore and Goodtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Goodtech 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 Goodtech will offset losses from the drop in Goodtech's long position.| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Borgestad A | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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