Correlation Between Solstad Offshore and Argen X
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Argen X 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 Argen X 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 Argen X, you can compare the effects of market volatilities on Solstad Offshore and Argen X 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 Argen X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Argen X.
Diversification Opportunities for Solstad Offshore and Argen X
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Solstad and Argen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Argen X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argen X 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 Argen X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argen X has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Argen X go up and down completely randomly.
Pair Corralation between Solstad Offshore and Argen X
Assuming the 90 days trading horizon Solstad Offshore is expected to generate 2.83 times less return on investment than Argen X. In addition to that, Solstad Offshore is 1.38 times more volatile than Argen X. It trades about 0.02 of its total potential returns per unit of risk. Argen X is currently generating about 0.08 per unit of volatility. If you would invest 60,297 in Argen X on October 26, 2024 and sell it today you would earn a total of 1,423 from holding Argen X or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Argen X
Performance |
| Timeline |
| Solstad Offshore ASA |
| Argen X |
Solstad Offshore and Argen X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Argen X
The main advantage of trading using opposite Solstad Offshore and Argen X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Argen X 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 Argen X will offset losses from the drop in Argen X's long position.| Solstad Offshore vs. Amedeo Air Four | Solstad Offshore vs. New Residential Investment | Solstad Offshore vs. Bankers Investment Trust | Solstad Offshore vs. Seraphim Space Investment |
| Argen X vs. Zegona Communications Plc | Argen X vs. United Internet AG | Argen X vs. Premier Foods PLC | Argen X vs. Grieg Seafood |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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