Correlation Between NIPPON TELTEL and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both NIPPON TELTEL 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 NIPPON TELTEL and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIPPON TELTEL and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on NIPPON TELTEL 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 NIPPON TELTEL with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIPPON TELTEL and EIDESVIK OFFSHORE.
Diversification Opportunities for NIPPON TELTEL and EIDESVIK OFFSHORE
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NIPPON and EIDESVIK is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NIPPON TELTEL and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and NIPPON TELTEL 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 NIPPON TELTEL 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 NIPPON TELTEL i.e., NIPPON TELTEL and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between NIPPON TELTEL and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon NIPPON TELTEL is expected to generate 0.3 times more return on investment than EIDESVIK OFFSHORE. However, NIPPON TELTEL is 3.34 times less risky than EIDESVIK OFFSHORE. It trades about -0.04 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about -0.03 per unit of risk. If you would invest 96.00 in NIPPON TELTEL on September 20, 2024 and sell it today you would lose (1.00) from holding NIPPON TELTEL or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIPPON TELTEL vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| NIPPON TELTEL |
| EIDESVIK OFFSHORE |
NIPPON TELTEL and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIPPON TELTEL and EIDESVIK OFFSHORE
The main advantage of trading using opposite NIPPON TELTEL and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIPPON TELTEL 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.| NIPPON TELTEL vs. EIDESVIK OFFSHORE NK | NIPPON TELTEL vs. United States Steel | NIPPON TELTEL vs. BlueScope Steel Limited | NIPPON TELTEL vs. Natural Health Trends |
| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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