Correlation Between Eidesvik Offshore and Jinhui Shipping
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Jinhui Shipping 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 Jinhui Shipping 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 Jinhui Shipping and, you can compare the effects of market volatilities on Eidesvik Offshore and Jinhui Shipping 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 Jinhui Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Jinhui Shipping.
Diversification Opportunities for Eidesvik Offshore and Jinhui Shipping
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eidesvik and Jinhui is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Jinhui Shipping and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Shipping 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 Jinhui Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Shipping has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Jinhui Shipping go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Jinhui Shipping
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.83 times more return on investment than Jinhui Shipping. However, Eidesvik Offshore ASA is 1.2 times less risky than Jinhui Shipping. It trades about 0.02 of its potential returns per unit of risk. Jinhui Shipping and is currently generating about 0.02 per unit of risk. If you would invest 1,281 in Eidesvik Offshore ASA on August 25, 2024 and sell it today you would earn a total of 73.00 from holding Eidesvik Offshore ASA or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Jinhui Shipping and
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Jinhui Shipping |
Eidesvik Offshore and Jinhui Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Jinhui Shipping
The main advantage of trading using opposite Eidesvik Offshore and Jinhui Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Jinhui Shipping 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 Jinhui Shipping will offset losses from the drop in Jinhui Shipping's long position.| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
| Jinhui Shipping vs. Shelf Drilling | Jinhui Shipping vs. Solstad Offsho | Jinhui Shipping vs. Eidesvik Offshore ASA | Jinhui Shipping vs. Elkem 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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