Correlation Between Eidesvik Offshore and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Grong Sparebank 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 Grong Sparebank 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 Grong Sparebank, you can compare the effects of market volatilities on Eidesvik Offshore and Grong Sparebank 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 Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Grong Sparebank.
Diversification Opportunities for Eidesvik Offshore and Grong Sparebank
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eidesvik and Grong is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank 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 Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Grong Sparebank go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Grong Sparebank
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Grong Sparebank. In addition to that, Eidesvik Offshore is 2.1 times more volatile than Grong Sparebank. It trades about -0.03 of its total potential returns per unit of risk. Grong Sparebank is currently generating about 0.05 per unit of volatility. If you would invest 14,000 in Grong Sparebank on September 3, 2024 and sell it today you would earn a total of 996.00 from holding Grong Sparebank or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Grong Sparebank
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Grong Sparebank |
Eidesvik Offshore and Grong Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Grong Sparebank
The main advantage of trading using opposite Eidesvik Offshore and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Grong Sparebank 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.| Eidesvik Offshore vs. BW Energy | Eidesvik Offshore vs. Subsea 7 SA | Eidesvik Offshore vs. BW LPG | Eidesvik Offshore vs. Dno ASA |
| Grong Sparebank vs. Techstep ASA | Grong Sparebank vs. Grieg Seafood ASA | Grong Sparebank vs. Odfjell Drilling | Grong Sparebank vs. Arcticzymes Technologies 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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