Correlation Between Park Aerospace and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Park Aerospace 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 Park Aerospace and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Aerospace Corp and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Park Aerospace 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 Park Aerospace with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Aerospace and Eidesvik Offshore.
Diversification Opportunities for Park Aerospace and Eidesvik Offshore
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and Eidesvik is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Park Aerospace Corp 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 Park Aerospace 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 Park Aerospace Corp 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 Park Aerospace i.e., Park Aerospace and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Park Aerospace and Eidesvik Offshore
Assuming the 90 days horizon Park Aerospace Corp is expected to generate 0.94 times more return on investment than Eidesvik Offshore. However, Park Aerospace Corp is 1.06 times less risky than Eidesvik Offshore. It trades about 0.15 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.05 per unit of risk. If you would invest 1,308 in Park Aerospace Corp on October 24, 2024 and sell it today you would earn a total of 82.00 from holding Park Aerospace Corp or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Aerospace Corp vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Park Aerospace Corp |
| Eidesvik Offshore ASA |
Park Aerospace and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Aerospace and Eidesvik Offshore
The main advantage of trading using opposite Park Aerospace and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Aerospace 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.| Park Aerospace vs. Costco Wholesale Corp | Park Aerospace vs. ARDAGH METAL PACDL 0001 | Park Aerospace vs. Caseys General Stores | Park Aerospace vs. PICKN PAY STORES |
| Eidesvik Offshore vs. REVO INSURANCE SPA | Eidesvik Offshore vs. Virtu Financial | Eidesvik Offshore vs. Direct Line Insurance | Eidesvik Offshore vs. Ameriprise Financial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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