Correlation Between Carmat SA and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Carmat SA 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 Carmat SA and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on Carmat SA 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 Carmat SA with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and EIDESVIK OFFSHORE.
Diversification Opportunities for Carmat SA and EIDESVIK OFFSHORE
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carmat and EIDESVIK is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and Carmat SA 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 Carmat SA 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 has no effect on the direction of Carmat SA i.e., Carmat SA and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between Carmat SA and EIDESVIK OFFSHORE
Assuming the 90 days horizon Carmat SA is expected to under-perform the EIDESVIK OFFSHORE. In addition to that, Carmat SA is 1.73 times more volatile than EIDESVIK OFFSHORE NK. It trades about -0.02 of its total potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.03 per unit of volatility. If you would invest 105.00 in EIDESVIK OFFSHORE NK on February 23, 2024 and sell it today you would earn a total of 31.00 from holding EIDESVIK OFFSHORE NK or generate 29.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Carmat SA vs. EIDESVIK OFFSHORE NK
Performance |
Timeline |
Carmat SA |
EIDESVIK OFFSHORE |
Carmat SA and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carmat SA and EIDESVIK OFFSHORE
The main advantage of trading using opposite Carmat SA and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA 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.Carmat SA vs. CITIUS RESOURCES LS 005 | Carmat SA vs. Superior Plus Corp | Carmat SA vs. NMI Holdings | Carmat SA vs. Origin Agritech |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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