Correlation Between Eidesvik Offshore and Aker Solutions

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Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore and Aker Solutions 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 Aker Solutions 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 Aker Solutions ASA, you can compare the effects of market volatilities on Eidesvik Offshore and Aker Solutions 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 Aker Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Aker Solutions.

Diversification Opportunities for Eidesvik Offshore and Aker Solutions

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Eidesvik and Aker is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Aker Solutions ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Solutions ASA 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 Aker Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Solutions ASA has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Aker Solutions go up and down completely randomly.

Pair Corralation between Eidesvik Offshore and Aker Solutions

Assuming the 90 days trading horizon Eidesvik Offshore ASA is expected to generate 0.82 times more return on investment than Aker Solutions. However, Eidesvik Offshore ASA is 1.22 times less risky than Aker Solutions. It trades about 0.06 of its potential returns per unit of risk. Aker Solutions ASA is currently generating about -0.08 per unit of risk. If you would invest  1,235  in Eidesvik Offshore ASA on May 31, 2025 and sell it today you would earn a total of  75.00  from holding Eidesvik Offshore ASA or generate 6.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.44%
ValuesDaily Returns

Eidesvik Offshore ASA  vs.  Aker Solutions ASA

 Performance 
       Timeline  
Eidesvik Offshore ASA 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
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. Despite quite conflicting essential indicators, Eidesvik Offshore may actually be approaching a critical reversion point that can send shares even higher in September 2025.
Aker Solutions ASA 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Aker Solutions ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Eidesvik Offshore and Aker Solutions Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eidesvik Offshore and Aker Solutions

The main advantage of trading using opposite Eidesvik Offshore and Aker Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore position performs unexpectedly, Aker Solutions 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 Aker Solutions will offset losses from the drop in Aker Solutions' long position.
The idea behind Eidesvik Offshore ASA and Aker Solutions ASA 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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