Correlation Between Eidesvik Offshore and Aker Solutions
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Eidesvik Offshore ASA vs. Aker Solutions ASA
Performance |
Timeline |
Eidesvik Offshore ASA |
Aker Solutions ASA |
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.Eidesvik Offshore vs. Aker Solutions ASA | Eidesvik Offshore vs. Atlantis Subsea Indonesia | Eidesvik Offshore vs. Dno ASA | Eidesvik Offshore vs. SD Standard Drilling |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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