Correlation Between Solstad Offshore and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Weiss Korea 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 Weiss Korea 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 Weiss Korea Opportunity, you can compare the effects of market volatilities on Solstad Offshore and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Weiss Korea.
Diversification Opportunities for Solstad Offshore and Weiss Korea
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solstad and Weiss is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Weiss Korea go up and down completely randomly.
Pair Corralation between Solstad Offshore and Weiss Korea
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 4.88 times more return on investment than Weiss Korea. However, Solstad Offshore is 4.88 times more volatile than Weiss Korea Opportunity. It trades about 0.2 of its potential returns per unit of risk. Weiss Korea Opportunity is currently generating about -0.33 per unit of risk. If you would invest 3,370 in Solstad Offshore ASA on September 2, 2024 and sell it today you would earn a total of 750.00 from holding Solstad Offshore ASA or generate 22.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Weiss Korea Opportunity
Performance |
| Timeline |
| Solstad Offshore ASA |
| Weiss Korea Opportunity |
Solstad Offshore and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Weiss Korea
The main advantage of trading using opposite Solstad Offshore and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| Solstad Offshore vs. Bisichi Mining PLC | Solstad Offshore vs. Metals Exploration Plc | Solstad Offshore vs. Dalata Hotel Group | Solstad Offshore vs. GoldMining |
| Weiss Korea vs. Toyota Motor Corp | Weiss Korea vs. SoftBank Group Corp | Weiss Korea vs. OTP Bank Nyrt | Weiss Korea vs. Las Vegas Sands |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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