Correlation Between Solstad Offshore and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Concurrent Technologies 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 Concurrent Technologies 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 Concurrent Technologies Plc, you can compare the effects of market volatilities on Solstad Offshore and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Concurrent Technologies.
Diversification Opportunities for Solstad Offshore and Concurrent Technologies
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solstad and Concurrent is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Concurrent Technologies go up and down completely randomly.
Pair Corralation between Solstad Offshore and Concurrent Technologies
Assuming the 90 days trading horizon Solstad Offshore is expected to generate 5.79 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, Solstad Offshore ASA is 1.32 times less risky than Concurrent Technologies. It trades about 0.11 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 13,225 in Concurrent Technologies Plc on October 25, 2024 and sell it today you would earn a total of 4,075 from holding Concurrent Technologies Plc or generate 30.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Concurrent Technologies Plc
Performance |
| Timeline |
| Solstad Offshore ASA |
| Concurrent Technologies |
Solstad Offshore and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Concurrent Technologies
The main advantage of trading using opposite Solstad Offshore and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| Solstad Offshore vs. Toyota Motor Corp | Solstad Offshore vs. SoftBank Group Corp | Solstad Offshore vs. OTP Bank Nyrt | Solstad Offshore vs. ONEOK Inc |
| Concurrent Technologies vs. Associated British Foods | Concurrent Technologies vs. SBM Offshore NV | Concurrent Technologies vs. Solstad Offshore ASA | Concurrent Technologies vs. National Beverage Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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