Correlation Between Euronav NV and Overseas Shipholding
Can any of the company-specific risk be diversified away by investing in both Euronav NV and Overseas Shipholding 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 Euronav NV and Overseas Shipholding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euronav NV and Overseas Shipholding Group, you can compare the effects of market volatilities on Euronav NV and Overseas Shipholding 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 Euronav NV with a short position of Overseas Shipholding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euronav NV and Overseas Shipholding.
Diversification Opportunities for Euronav NV and Overseas Shipholding
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Euronav and Overseas is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Euronav NV and Overseas Shipholding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overseas Shipholding and Euronav NV 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 Euronav NV are associated (or correlated) with Overseas Shipholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overseas Shipholding has no effect on the direction of Euronav NV i.e., Euronav NV and Overseas Shipholding go up and down completely randomly.
Pair Corralation between Euronav NV and Overseas Shipholding
Given the investment horizon of 90 days Euronav NV is expected to generate 1.62 times less return on investment than Overseas Shipholding. But when comparing it to its historical volatility, Euronav NV is 1.03 times less risky than Overseas Shipholding. It trades about 0.07 of its potential returns per unit of risk. Overseas Shipholding Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 316.00 in Overseas Shipholding Group on August 31, 2024 and sell it today you would earn a total of 533.00 from holding Overseas Shipholding Group or generate 168.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Euronav NV vs. Overseas Shipholding Group
Performance |
| Timeline |
| Euronav NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Overseas Shipholding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Euronav NV and Overseas Shipholding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euronav NV and Overseas Shipholding
The main advantage of trading using opposite Euronav NV and Overseas Shipholding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euronav NV position performs unexpectedly, Overseas Shipholding 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 Overseas Shipholding will offset losses from the drop in Overseas Shipholding's long position.| Euronav NV vs. Frontline | Euronav NV vs. Teekay Tankers | Euronav NV vs. Scorpio Tankers | Euronav NV vs. DHT Holdings |
| Overseas Shipholding vs. Teekay | Overseas Shipholding vs. Frontline | Overseas Shipholding vs. Alexander Baldwin Holdings | Overseas Shipholding vs. Torm PLC Class |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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