Correlation Between Eidesvik Offshore and Sea1 Offshore
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Sea1 Offshore 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 Sea1 Offshore 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 Sea1 Offshore, you can compare the effects of market volatilities on Eidesvik Offshore and Sea1 Offshore 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 Sea1 Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Sea1 Offshore.
Diversification Opportunities for Eidesvik Offshore and Sea1 Offshore
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eidesvik and Sea1 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Sea1 Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea1 Offshore 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 Sea1 Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea1 Offshore has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Sea1 Offshore go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Sea1 Offshore
Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to under-perform the Sea1 Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Eidesvik Offshore ASA is 1.77 times less risky than Sea1 Offshore. The stock trades about -0.16 of its potential returns per unit of risk. The Sea1 Offshore is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Sea1 Offshore on September 1, 2024 and sell it today you would earn a total of 185.00 from holding Sea1 Offshore or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Sea1 Offshore
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Sea1 Offshore |
Eidesvik Offshore and Sea1 Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Sea1 Offshore
The main advantage of trading using opposite Eidesvik Offshore and Sea1 Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Sea1 Offshore 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 Sea1 Offshore will offset losses from the drop in Sea1 Offshore's long position.| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
| Sea1 Offshore vs. Cloudberry Clean Energy | Sea1 Offshore vs. Proximar Seafood AS | Sea1 Offshore vs. Nordic Semiconductor ASA | Sea1 Offshore vs. Jaeren Sparebank |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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