Correlation Between Solstad Offshore and Global Net
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Global Net 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 Solstad Offshore and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solstad Offshore ASA and Global Net Lease, you can compare the effects of market volatilities on Solstad Offshore and Global Net 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 Solstad Offshore with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Global Net.
Diversification Opportunities for Solstad Offshore and Global Net
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solstad and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Solstad 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 Solstad Offshore ASA are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Global Net go up and down completely randomly.
Pair Corralation between Solstad Offshore and Global Net
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 4.02 times more return on investment than Global Net. However, Solstad Offshore is 4.02 times more volatile than Global Net Lease. It trades about 0.17 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.13 per unit of risk. If you would invest 3,254 in Solstad Offshore ASA on September 13, 2024 and sell it today you would earn a total of 598.00 from holding Solstad Offshore ASA or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Global Net Lease
Performance |
| Timeline |
| Solstad Offshore ASA |
| Global Net Lease |
Solstad Offshore and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Global Net
The main advantage of trading using opposite Solstad Offshore and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Solstad Offshore vs. Samsung Electronics Co | Solstad Offshore vs. Samsung Electronics Co | Solstad Offshore vs. Hyundai Motor | Solstad Offshore vs. Reliance Industries Ltd |
| Global Net vs. Samsung Electronics Co | Global Net vs. Samsung Electronics Co | Global Net vs. Hyundai Motor | Global Net vs. Reliance Industries Ltd |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |