Correlation Between NRC Group and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both NRC Group 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 NRC Group and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRC Group ASA and Eidesvik Offshore ASA, you can compare the effects of market volatilities on NRC Group 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 NRC Group with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRC Group and Eidesvik Offshore.
Diversification Opportunities for NRC Group and Eidesvik Offshore
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between NRC and Eidesvik is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NRC Group 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 NRC Group 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 NRC Group 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 NRC Group i.e., NRC Group and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between NRC Group and Eidesvik Offshore
Assuming the 90 days trading horizon NRC Group ASA is expected to generate 2.84 times more return on investment than Eidesvik Offshore. However, NRC Group is 2.84 times more volatile than Eidesvik Offshore ASA. It trades about 0.39 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.16 per unit of risk. If you would invest 345.00 in NRC Group ASA on September 1, 2024 and sell it today you would earn a total of 135.00 from holding NRC Group ASA or generate 39.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRC Group ASA vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| NRC Group ASA |
| Eidesvik Offshore ASA |
NRC Group and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRC Group and Eidesvik Offshore
The main advantage of trading using opposite NRC Group and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRC Group 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.| NRC Group vs. Eidesvik Offshore ASA | NRC Group vs. Borgestad A | NRC Group vs. Kitron ASA | NRC Group vs. Havila Shipping ASA |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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