Correlation Between Eidesvik Offshore and ScanSource

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

Diversification Opportunities for Eidesvik Offshore and ScanSource

0.88

Correlation Coefficient

Eidesvik Offshore  ScanSource

Very poor diversification

The 3 months correlation between Eidesvik and ScanSource is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and ScanSource go up and down completely randomly.

Pair Corralation between Eidesvik Offshore and ScanSource

Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 2.01 times less return on investment than ScanSource. In addition to that, Eidesvik Offshore is 1.1 times more volatile than ScanSource. It trades about 0.09 of its total potential returns per unit of risk. ScanSource is currently generating about 0.2 per unit of volatility. If you would invest  2,700  in ScanSource on April 20, 2025 and sell it today you would earn a total of  760.00  from holding ScanSource or generate 28.15% return on investment over 90 days.

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

Eidesvik Offshore ASA  vs.  ScanSource

Eidesvik Offshore ASA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eidesvik Offshore ASA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Eidesvik Offshore unveiled solid returns over the last few months and may actually be approaching a breakup point.

ScanSource

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ScanSource reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eidesvik Offshore and ScanSource

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

The idea behind Eidesvik Offshore ASA and ScanSource 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .