Correlation Between Yara International and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Yara International 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 Yara International and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Yara International 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 Yara International with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and Eidesvik Offshore.
Diversification Opportunities for Yara International and Eidesvik Offshore
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yara and Eidesvik is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Yara International 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 Yara International 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 Yara International 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 Yara International i.e., Yara International and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Yara International and Eidesvik Offshore
Assuming the 90 days trading horizon Yara International ASA is expected to under-perform the Eidesvik Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Yara International ASA is 1.4 times less risky than Eidesvik Offshore. The stock trades about -0.27 of its potential returns per unit of risk. The Eidesvik Offshore ASA is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 1,396 in Eidesvik Offshore ASA on September 1, 2024 and sell it today you would lose (74.00) from holding Eidesvik Offshore ASA or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Yara International ASA |
| Eidesvik Offshore ASA |
Yara International and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and Eidesvik Offshore
The main advantage of trading using opposite Yara International and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International 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.| Yara International vs. Telenor ASA | Yara International vs. Orkla ASA | Yara International vs. DnB ASA | Yara International vs. Storebrand ASA |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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