Correlation Between Eidesvik Offshore and Prosafe SE
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Prosafe SE 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 Prosafe SE 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 Prosafe SE, you can compare the effects of market volatilities on Eidesvik Offshore and Prosafe SE 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 Prosafe SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Prosafe SE.
Diversification Opportunities for Eidesvik Offshore and Prosafe SE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eidesvik and Prosafe is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Prosafe SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosafe SE 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 Prosafe SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosafe SE has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Prosafe SE go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Prosafe SE
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.2 times more return on investment than Prosafe SE. However, Eidesvik Offshore ASA is 5.1 times less risky than Prosafe SE. It trades about -0.16 of its potential returns per unit of risk. Prosafe SE is currently generating about -0.61 per unit of risk. If you would invest 1,396 in Eidesvik Offshore ASA on September 1, 2024 and sell it today you would lose (74.00) from holding Eidesvik Offshore ASA or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Prosafe SE
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Prosafe SE |
Eidesvik Offshore and Prosafe SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Prosafe SE
The main advantage of trading using opposite Eidesvik Offshore and Prosafe SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Prosafe SE 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 Prosafe SE will offset losses from the drop in Prosafe SE's long position.| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
| Prosafe SE vs. Aker ASA | Prosafe SE vs. Subsea 7 SA | Prosafe SE vs. TGS NOPEC Geophysical | Prosafe SE vs. BW Offshore |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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