Correlation Between MAG SILVER and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both MAG SILVER 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 MAG SILVER and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Eidesvik Offshore ASA, you can compare the effects of market volatilities on MAG SILVER 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 MAG SILVER with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Eidesvik Offshore.
Diversification Opportunities for MAG SILVER and Eidesvik Offshore
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAG and Eidesvik is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER 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 MAG SILVER 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 MAG SILVER 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 MAG SILVER i.e., MAG SILVER and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between MAG SILVER and Eidesvik Offshore
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.49 times more return on investment than Eidesvik Offshore. However, MAG SILVER is 1.49 times more volatile than Eidesvik Offshore ASA. It trades about 0.28 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.07 per unit of risk. If you would invest 1,315 in MAG SILVER on November 3, 2024 and sell it today you would earn a total of 268.00 from holding MAG SILVER or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| MAG SILVER |
| Eidesvik Offshore ASA |
MAG SILVER and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Eidesvik Offshore
The main advantage of trading using opposite MAG SILVER and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER 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.| MAG SILVER vs. SIVERS SEMICONDUCTORS AB | MAG SILVER vs. NorAm Drilling AS | MAG SILVER vs. Volkswagen AG | MAG SILVER vs. Darden Restaurants |
| Eidesvik Offshore vs. Altair Engineering | Eidesvik Offshore vs. CONTAGIOUS GAMING INC | Eidesvik Offshore vs. RYANAIR HLDGS ADR | Eidesvik Offshore vs. Boyd Gaming |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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