Correlation Between Media and Eidesvik Offshore

Can any of the company-specific risk be diversified away by investing in both Media 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 Media and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Media and Games and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Media 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 Media with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and Eidesvik Offshore.

Diversification Opportunities for Media and Eidesvik Offshore

0.45

Correlation Coefficient

Media  Eidesvik Offshore

Very weak diversification

The 3 months correlation between Media and Eidesvik is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games 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 Media 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 Media and Games 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 Media i.e., Media and Eidesvik Offshore go up and down completely randomly.

Pair Corralation between Media and Eidesvik Offshore

Assuming the 90 days horizon Media is expected to generate 1.85 times less return on investment than Eidesvik Offshore. In addition to that, Media is 1.87 times more volatile than Eidesvik Offshore ASA. It trades about 0.03 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  93.00  in Eidesvik Offshore ASA on April 25, 2025 and sell it today you would earn a total of  11.00  from holding Eidesvik Offshore ASA or generate 11.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	87.3%
Values	Daily Returns

Media and Games  vs.  Eidesvik Offshore ASA

Media and Games

Risk-Adjusted Performance

Weak

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Media may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Eidesvik Offshore unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Media and Eidesvik Offshore

The main advantage of trading using opposite Media and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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.

The idea behind Media and Games and Eidesvik Offshore 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..