Correlation Between Eidesvik Offshore and Stolt Nielsen
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Stolt Nielsen 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 Stolt Nielsen 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 Stolt Nielsen Limited, you can compare the effects of market volatilities on Eidesvik Offshore and Stolt Nielsen 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 Stolt Nielsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Stolt Nielsen.
Diversification Opportunities for Eidesvik Offshore and Stolt Nielsen
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eidesvik and Stolt is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Stolt Nielsen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stolt Nielsen Limited 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 Stolt Nielsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stolt Nielsen Limited has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Stolt Nielsen go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Stolt Nielsen
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 1.05 times less return on investment than Stolt Nielsen. In addition to that, Eidesvik Offshore is 1.07 times more volatile than Stolt Nielsen Limited. It trades about 0.04 of its total potential returns per unit of risk. Stolt Nielsen Limited is currently generating about 0.04 per unit of volatility. If you would invest 23,138 in Stolt Nielsen Limited on August 29, 2024 and sell it today you would earn a total of 5,512 from holding Stolt Nielsen Limited or generate 23.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Stolt Nielsen Limited
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Stolt Nielsen Limited |
Eidesvik Offshore and Stolt Nielsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Stolt Nielsen
The main advantage of trading using opposite Eidesvik Offshore and Stolt Nielsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Stolt Nielsen 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 Stolt Nielsen will offset losses from the drop in Stolt Nielsen's long position.| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
| Stolt Nielsen vs. Byggma | Stolt Nielsen vs. Gigante Salmon AS | Stolt Nielsen vs. Elkem ASA | Stolt Nielsen vs. DNB NOR KAPFORV |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |