Correlation Between Solstad Offshore and Ao World
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Ao World 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 Ao World 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 Ao World, you can compare the effects of market volatilities on Solstad Offshore and Ao World 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 Ao World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Ao World.
Diversification Opportunities for Solstad Offshore and Ao World
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Solstad and Ao World is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Ao World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ao World 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 Ao World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ao World has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Ao World go up and down completely randomly.
Pair Corralation between Solstad Offshore and Ao World
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 3.98 times more return on investment than Ao World. However, Solstad Offshore is 3.98 times more volatile than Ao World. It trades about 0.23 of its potential returns per unit of risk. Ao World is currently generating about 0.17 per unit of risk. If you would invest 3,060 in Solstad Offshore ASA on September 14, 2024 and sell it today you would earn a total of 792.00 from holding Solstad Offshore ASA or generate 25.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Ao World
Performance |
| Timeline |
| Solstad Offshore ASA |
| Ao World |
Solstad Offshore and Ao World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Ao World
The main advantage of trading using opposite Solstad Offshore and Ao World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Ao World 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 Ao World will offset losses from the drop in Ao World'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 |
| Ao World vs. Batm Advanced Communications | Ao World vs. Spire Healthcare Group | Ao World vs. Induction Healthcare Group | Ao World vs. Cars Inc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |