Correlation Between Solstad Offshore and Greenroc Mining
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Greenroc Mining 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 Greenroc Mining 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 Greenroc Mining PLC, you can compare the effects of market volatilities on Solstad Offshore and Greenroc Mining 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 Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Greenroc Mining.
Diversification Opportunities for Solstad Offshore and Greenroc Mining
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solstad and Greenroc is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining PLC 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 Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Greenroc Mining go up and down completely randomly.
Pair Corralation between Solstad Offshore and Greenroc Mining
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 0.67 times more return on investment than Greenroc Mining. However, Solstad Offshore ASA is 1.48 times less risky than Greenroc Mining. It trades about 0.06 of its potential returns per unit of risk. Greenroc Mining PLC is currently generating about -0.01 per unit of risk. If you would invest 2,800 in Solstad Offshore ASA on August 26, 2024 and sell it today you would earn a total of 1,130 from holding Solstad Offshore ASA or generate 40.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Greenroc Mining PLC
Performance |
| Timeline |
| Solstad Offshore ASA |
| Greenroc Mining PLC |
Solstad Offshore and Greenroc Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Greenroc Mining
The main advantage of trading using opposite Solstad Offshore and Greenroc Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Greenroc Mining 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 Greenroc Mining will offset losses from the drop in Greenroc Mining's long position.| Solstad Offshore vs. Air Products Chemicals | Solstad Offshore vs. New Residential Investment | Solstad Offshore vs. Liontrust Asset Management | Solstad Offshore vs. FC Investment Trust |
| Greenroc Mining vs. Givaudan SA | Greenroc Mining vs. Antofagasta PLC | Greenroc Mining vs. Centamin PLC | Greenroc Mining vs. Atalaya Mining |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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