Correlation Between CHINA OIL and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both CHINA OIL 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 CHINA OIL and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA OIL AND and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on CHINA OIL 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 CHINA OIL with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA OIL and EIDESVIK OFFSHORE.
Diversification Opportunities for CHINA OIL and EIDESVIK OFFSHORE
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between CHINA and EIDESVIK is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CHINA OIL AND and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and CHINA OIL 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 CHINA OIL AND 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 has no effect on the direction of CHINA OIL i.e., CHINA OIL and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between CHINA OIL and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon CHINA OIL AND is expected to generate 0.29 times more return on investment than EIDESVIK OFFSHORE. However, CHINA OIL AND is 3.39 times less risky than EIDESVIK OFFSHORE. It trades about -0.15 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about -0.06 per unit of risk. If you would invest 2.25 in CHINA OIL AND on November 30, 2024 and sell it today you would lose (0.10) from holding CHINA OIL AND or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
CHINA OIL AND vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| CHINA OIL AND |
| EIDESVIK OFFSHORE |
CHINA OIL and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA OIL and EIDESVIK OFFSHORE
The main advantage of trading using opposite CHINA OIL and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA OIL 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.| CHINA OIL vs. NAGOYA RAILROAD | CHINA OIL vs. Yunnan Water Investment | CHINA OIL vs. COPLAND ROAD CAPITAL | CHINA OIL vs. MidCap Financial Investment |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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