Correlation Between Talanx AG and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Talanx AG 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 Talanx AG and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talanx AG and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Talanx AG 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 Talanx AG with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talanx AG and Eidesvik Offshore.
Diversification Opportunities for Talanx AG and Eidesvik Offshore
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Talanx and Eidesvik is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Talanx AG 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 Talanx AG 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 Talanx AG 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 Talanx AG i.e., Talanx AG and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Talanx AG and Eidesvik Offshore
Assuming the 90 days horizon Talanx AG is expected to under-perform the Eidesvik Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Talanx AG is 1.68 times less risky than Eidesvik Offshore. The stock trades about -0.05 of its potential returns per unit of risk. The Eidesvik Offshore ASA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 108.00 in Eidesvik Offshore ASA on October 9, 2024 and sell it today you would earn a total of 7.00 from holding Eidesvik Offshore ASA or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talanx AG vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Talanx AG |
| Eidesvik Offshore ASA |
Talanx AG and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talanx AG and Eidesvik Offshore
The main advantage of trading using opposite Talanx AG and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talanx AG 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.| Talanx AG vs. RYMAN HEALTHCAR | Talanx AG vs. Wenzhou Kangning Hospital | Talanx AG vs. Ubisoft Entertainment SA | Talanx AG vs. US Physical Therapy |
| Eidesvik Offshore vs. Ultra Clean Holdings | Eidesvik Offshore vs. Amkor Technology | Eidesvik Offshore vs. NetSol Technologies | Eidesvik Offshore vs. Canadian Utilities Limited |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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