Correlation Between PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and Eidesvik Offshore ASA, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PROSIEBENSAT1 and Eidesvik is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 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 PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4 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 PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 1.06 times more return on investment than Eidesvik Offshore. However, PROSIEBENSAT1 MEDIADR4/ is 1.06 times more volatile than Eidesvik Offshore ASA. It trades about 0.11 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.03 per unit of risk. If you would invest 126.00 in PROSIEBENSAT1 MEDIADR4 on November 4, 2024 and sell it today you would earn a total of 6.00 from holding PROSIEBENSAT1 MEDIADR4 or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| Eidesvik Offshore ASA |
PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ 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.| PROSIEBENSAT1 MEDIADR4/ vs. PREMIER FOODS | PROSIEBENSAT1 MEDIADR4/ vs. Air New Zealand | PROSIEBENSAT1 MEDIADR4/ vs. SEALED AIR | PROSIEBENSAT1 MEDIADR4/ vs. Tyson Foods |
| Eidesvik Offshore vs. MCEWEN MINING INC | Eidesvik Offshore vs. GREENX METALS LTD | Eidesvik Offshore vs. MAGNUM MINING EXP | Eidesvik Offshore vs. Endeavour Mining PLC |
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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