Correlation Between NEWELL RUBBERMAID and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID 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 NEWELL RUBBERMAID and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and Eidesvik Offshore ASA, you can compare the effects of market volatilities on NEWELL RUBBERMAID 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 NEWELL RUBBERMAID with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and Eidesvik Offshore.
Diversification Opportunities for NEWELL RUBBERMAID and Eidesvik Offshore
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NEWELL and Eidesvik is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID 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 NEWELL RUBBERMAID 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 NEWELL RUBBERMAID 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 NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and Eidesvik Offshore
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 3.98 times less return on investment than Eidesvik Offshore. In addition to that, NEWELL RUBBERMAID is 1.16 times more volatile than Eidesvik Offshore ASA. It trades about 0.01 of its total potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.05 per unit of volatility. If you would invest 69.00 in Eidesvik Offshore ASA on September 20, 2024 and sell it today you would earn a total of 42.00 from holding Eidesvik Offshore ASA or generate 60.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| Eidesvik Offshore ASA |
NEWELL RUBBERMAID and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and Eidesvik Offshore
The main advantage of trading using opposite NEWELL RUBBERMAID and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID 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.| NEWELL RUBBERMAID vs. Granite Construction | NEWELL RUBBERMAID vs. Sterling Construction | NEWELL RUBBERMAID vs. Titan Machinery | NEWELL RUBBERMAID vs. Cardinal Health |
| Eidesvik Offshore vs. Ryanair Holdings plc | Eidesvik Offshore vs. IMAGIN MEDICAL INC | Eidesvik Offshore vs. Westinghouse Air Brake | Eidesvik Offshore vs. MEDICAL FACILITIES NEW |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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