Correlation Between Solstad Offshore and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Wheaton Precious 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 Wheaton Precious 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 Wheaton Precious Metals, you can compare the effects of market volatilities on Solstad Offshore and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Wheaton Precious.
Diversification Opportunities for Solstad Offshore and Wheaton Precious
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solstad and Wheaton is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Wheaton Precious go up and down completely randomly.
Pair Corralation between Solstad Offshore and Wheaton Precious
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 2.73 times more return on investment than Wheaton Precious. However, Solstad Offshore is 2.73 times more volatile than Wheaton Precious Metals. It trades about 0.21 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about -0.1 per unit of risk. If you would invest 3,335 in Solstad Offshore ASA on September 1, 2024 and sell it today you would earn a total of 785.00 from holding Solstad Offshore ASA or generate 23.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Wheaton Precious Metals
Performance |
| Timeline |
| Solstad Offshore ASA |
| Wheaton Precious Metals |
Solstad Offshore and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Wheaton Precious
The main advantage of trading using opposite Solstad Offshore and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.| Solstad Offshore vs. Uniper SE | Solstad Offshore vs. Mulberry Group PLC | Solstad Offshore vs. London Security Plc | Solstad Offshore vs. Triad Group PLC |
| Wheaton Precious vs. Schroders Investment Trusts | Wheaton Precious vs. FC Investment Trust | Wheaton Precious vs. Hansa Investment | Wheaton Precious vs. Sligro Food Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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