Correlation Between Otovo AS and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Otovo AS 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 Otovo AS and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otovo AS and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Otovo AS 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 Otovo AS with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otovo AS and Eidesvik Offshore.
Diversification Opportunities for Otovo AS and Eidesvik Offshore
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Otovo and Eidesvik is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Otovo AS 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 Otovo AS 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 Otovo AS 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 Otovo AS i.e., Otovo AS and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Otovo AS and Eidesvik Offshore
Assuming the 90 days trading horizon Otovo AS is expected to under-perform the Eidesvik Offshore. In addition to that, Otovo AS is 1.17 times more volatile than Eidesvik Offshore ASA. It trades about -0.05 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 1,200 in Eidesvik Offshore ASA on May 7, 2025 and sell it today you would earn a total of 130.00 from holding Eidesvik Offshore ASA or generate 10.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Otovo AS vs. Eidesvik Offshore ASA
Performance |
Timeline |
Otovo AS |
Eidesvik Offshore ASA |
Otovo AS and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Otovo AS and Eidesvik Offshore
The main advantage of trading using opposite Otovo AS and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otovo AS 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.Otovo AS vs. Morrow Bank ASA | Otovo AS vs. Sparebank 1 SMN | Otovo AS vs. Jaeren Sparebank | Otovo AS vs. Odfjell Technology |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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