Correlation Between Nordic Technology and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Nordic Technology 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 Technology 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 Technology Group and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Nordic Technology 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 Technology with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Eidesvik Offshore.
Diversification Opportunities for Nordic Technology and Eidesvik Offshore
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordic and Eidesvik is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group 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 Technology 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 Technology Group 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 Technology i.e., Nordic Technology and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Nordic Technology and Eidesvik Offshore
Assuming the 90 days trading horizon Nordic Technology Group is expected to under-perform the Eidesvik Offshore. In addition to that, Nordic Technology is 3.85 times more volatile than Eidesvik Offshore ASA. It trades about -0.27 of its total potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.18 per unit of volatility. If you would invest 1,358 in Eidesvik Offshore ASA on November 28, 2024 and sell it today you would lose (98.00) from holding Eidesvik Offshore ASA or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Technology Group vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Nordic Technology |
| Eidesvik Offshore ASA |
Nordic Technology and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Eidesvik Offshore
The main advantage of trading using opposite Nordic Technology and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology 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 Technology vs. Aasen Sparebank | Nordic Technology vs. Polaris Media | Nordic Technology vs. Pareto Bank ASA | Nordic Technology vs. Kraft Bank 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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