Correlation Between Hisense Home and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Hisense Home and Eidesvik 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 Hisense Home and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hisense Home Appliances and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Hisense Home and Eidesvik 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 Hisense Home with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Eidesvik Offshore.
Diversification Opportunities for Hisense Home and Eidesvik Offshore
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hisense and Eidesvik is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Eidesvik Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eidesvik Offshore ASA and Hisense Home 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 Hisense Home Appliances are associated (or correlated) with Eidesvik Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eidesvik Offshore ASA has no effect on the direction of Hisense Home i.e., Hisense Home and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Hisense Home and Eidesvik Offshore
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.86 times more return on investment than Eidesvik Offshore. However, Hisense Home is 1.86 times more volatile than Eidesvik Offshore ASA. It trades about 0.06 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.08 per unit of risk. If you would invest 269.00 in Hisense Home Appliances on November 7, 2024 and sell it today you would earn a total of 62.00 from holding Hisense Home Appliances or generate 23.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Hisense Home Appliances |
| Eidesvik Offshore ASA |
Hisense Home and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Eidesvik Offshore
The main advantage of trading using opposite Hisense Home and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, Eidesvik 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 Eidesvik Offshore will offset losses from the drop in Eidesvik Offshore's long position.| Hisense Home vs. Alaska Air Group | Hisense Home vs. FIREWEED METALS P | Hisense Home vs. DAIDO METAL TD | Hisense Home vs. CORNISH METALS INC |
| Eidesvik Offshore vs. United States Steel | Eidesvik Offshore vs. BRIT AMER TOBACCO | Eidesvik Offshore vs. ELL ENVIRONHLDGS HD 0001 | Eidesvik Offshore vs. Mount Gibson Iron |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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