Correlation Between Eidesvik Offshore and HAV Group
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and HAV Group 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 HAV Group 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 HAV Group ASA, you can compare the effects of market volatilities on Eidesvik Offshore and HAV Group 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 HAV Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and HAV Group.
Diversification Opportunities for Eidesvik Offshore and HAV Group
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eidesvik and HAV is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and HAV Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAV Group 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 HAV Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAV Group ASA has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and HAV Group go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and HAV Group
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.96 times more return on investment than HAV Group. However, Eidesvik Offshore ASA is 1.04 times less risky than HAV Group. It trades about -0.03 of its potential returns per unit of risk. HAV Group ASA is currently generating about -0.08 per unit of risk. If you would invest 1,543 in Eidesvik Offshore ASA on September 3, 2024 and sell it today you would lose (221.00) from holding Eidesvik Offshore ASA or give up 14.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. HAV Group ASA
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| HAV Group ASA |
Eidesvik Offshore and HAV Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and HAV Group
The main advantage of trading using opposite Eidesvik Offshore and HAV Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, HAV Group 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 HAV Group will offset losses from the drop in HAV Group's long position.| Eidesvik Offshore vs. BW Energy | Eidesvik Offshore vs. Subsea 7 SA | Eidesvik Offshore vs. BW LPG | Eidesvik Offshore vs. Dno ASA |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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