Correlation Between CVW CLEANTECH and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH 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 CVW CLEANTECH and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and Eidesvik Offshore ASA, you can compare the effects of market volatilities on CVW CLEANTECH 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 CVW CLEANTECH with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Eidesvik Offshore.
Diversification Opportunities for CVW CLEANTECH and Eidesvik Offshore
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVW and Eidesvik is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC 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 CVW CLEANTECH 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 CVW CLEANTECH INC 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 CVW CLEANTECH i.e., CVW CLEANTECH and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Eidesvik Offshore
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the Eidesvik Offshore. In addition to that, CVW CLEANTECH is 1.21 times more volatile than Eidesvik Offshore ASA. It trades about -0.16 of its total potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.09 per unit of volatility. If you would invest 115.00 in Eidesvik Offshore ASA on November 5, 2024 and sell it today you would lose (5.00) from holding Eidesvik Offshore ASA or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Eidesvik Offshore ASA |
CVW CLEANTECH and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Eidesvik Offshore
The main advantage of trading using opposite CVW CLEANTECH and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH 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.| CVW CLEANTECH vs. Yuexiu Transport Infrastructure | CVW CLEANTECH vs. INTERNET INJPADR 1 | CVW CLEANTECH vs. China Communications Services | CVW CLEANTECH vs. TITANIUM TRANSPORTGROUP |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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