Correlation Between Nordic Mining and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Nordic Mining 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 Nordic Mining and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Mining ASA and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Nordic Mining 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 Nordic Mining with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Eidesvik Offshore.
Diversification Opportunities for Nordic Mining and Eidesvik Offshore
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nordic and Eidesvik is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA 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 Nordic Mining 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 Nordic Mining ASA 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 Nordic Mining i.e., Nordic Mining and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Nordic Mining and Eidesvik Offshore
Assuming the 90 days trading horizon Nordic Mining ASA is expected to under-perform the Eidesvik Offshore. In addition to that, Nordic Mining is 1.18 times more volatile than Eidesvik Offshore ASA. It trades about -0.22 of its total potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.03 per unit of volatility. If you would invest 1,350 in Eidesvik Offshore ASA on October 26, 2024 and sell it today you would earn a total of 18.00 from holding Eidesvik Offshore ASA or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Nordic Mining ASA |
| Eidesvik Offshore ASA |
Nordic Mining and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Eidesvik Offshore
The main advantage of trading using opposite Nordic Mining and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining 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.| Nordic Mining vs. Proximar Seafood AS | Nordic Mining vs. Polaris Media | Nordic Mining vs. Odfjell Technology | Nordic Mining vs. Romsdal Sparebank |
| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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