Correlation Between Var Energi and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Var Energi 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 Var Energi and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Var Energi ASA and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Var Energi 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 Var Energi with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Var Energi and Eidesvik Offshore.
Diversification Opportunities for Var Energi and Eidesvik Offshore
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Var and Eidesvik is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Var Energi ASA 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 Var Energi 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 Var Energi ASA 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 Var Energi i.e., Var Energi and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Var Energi and Eidesvik Offshore
Assuming the 90 days trading horizon Var Energi ASA is expected to generate 1.12 times more return on investment than Eidesvik Offshore. However, Var Energi is 1.12 times more volatile than Eidesvik Offshore ASA. It trades about 0.14 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.16 per unit of risk. If you would invest 3,455 in Var Energi ASA on September 1, 2024 and sell it today you would earn a total of 171.00 from holding Var Energi ASA or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Var Energi ASA vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Var Energi ASA |
| Eidesvik Offshore ASA |
Var Energi and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Var Energi and Eidesvik Offshore
The main advantage of trading using opposite Var Energi and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Var Energi 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.| Var Energi vs. Aker BP ASA | Var Energi vs. Belships | Var Energi vs. MPC Container Ships | Var Energi vs. BW Energy |
| Eidesvik Offshore vs. Solstad Offsho | Eidesvik Offshore vs. Havila Shipping ASA | Eidesvik Offshore vs. Prosafe SE | Eidesvik Offshore vs. BW Offshore |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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