Correlation Between Eidesvik Offshore and Playmates Toys

Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Playmates Toys 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 Eidesvik Offshore and Playmates Toys into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eidesvik Offshore ASA and Playmates Toys Limited, you can compare the effects of market volatilities on Eidesvik Offshore and Playmates Toys 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 Eidesvik Offshore with a short position of Playmates Toys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Playmates Toys.

Diversification Opportunities for Eidesvik Offshore and Playmates Toys

0.12

Correlation Coefficient

Eidesvik Offshore  Playmates Toys

Average diversification

The 3 months correlation between Eidesvik and Playmates is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Playmates Toys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playmates Toys and Eidesvik Offshore 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 Eidesvik Offshore ASA are associated (or correlated) with Playmates Toys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playmates Toys has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Playmates Toys go up and down completely randomly.

Pair Corralation between Eidesvik Offshore and Playmates Toys

Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.67 times more return on investment than Playmates Toys. However, Eidesvik Offshore ASA is 1.5 times less risky than Playmates Toys. It trades about 0.07 of its potential returns per unit of risk. Playmates Toys Limited is currently generating about 0.02 per unit of risk. If you would invest  99.00  in Eidesvik Offshore ASA on May 7, 2025 and sell it today you would earn a total of  9.00  from holding Eidesvik Offshore ASA or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Eidesvik Offshore ASA  vs.  Playmates Toys Limited

Eidesvik Offshore ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eidesvik Offshore ASA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Eidesvik Offshore may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Playmates Toys

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Playmates Toys Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Playmates Toys is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eidesvik Offshore and Playmates Toys

The main advantage of trading using opposite Eidesvik Offshore and Playmates Toys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Playmates Toys 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 Playmates Toys will offset losses from the drop in Playmates Toys' long position.

The idea behind Eidesvik Offshore ASA and Playmates Toys Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.