Correlation Between Eidesvik Offshore and Otello ASA

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

Diversification Opportunities for Eidesvik Offshore and Otello ASA

0.0

Correlation Coefficient

Eidesvik Offshore  Otello ASA

Pay attention - limited upside

The 3 months correlation between Eidesvik and Otello is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Otello ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otello 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 Otello ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otello ASA has no effect on the direction of Eidesvik Offshore i.e., Eidesvik Offshore and Otello ASA go up and down completely randomly.

Pair Corralation between Eidesvik Offshore and Otello ASA

If you would invest  1,130  in Eidesvik Offshore ASA on April 24, 2025 and sell it today you would earn a total of  155.00  from holding Eidesvik Offshore ASA or generate 13.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Eidesvik Offshore ASA  vs.  Otello ASA

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 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Eidesvik Offshore disclosed solid returns over the last few months and may actually be approaching a breakup point.

Otello ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Otello ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Otello ASA is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Eidesvik Offshore and Otello ASA

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

The idea behind Eidesvik Offshore ASA and Otello 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.