Correlation Between Atresmedia and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Atresmedia and Solstad Offshore 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 Atresmedia and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atresmedia and Solstad Offshore ASA, you can compare the effects of market volatilities on Atresmedia and Solstad Offshore 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 Atresmedia with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atresmedia and Solstad Offshore.
Diversification Opportunities for Atresmedia and Solstad Offshore
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atresmedia and Solstad is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Atresmedia and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA and Atresmedia 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 Atresmedia are associated (or correlated) with Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Atresmedia i.e., Atresmedia and Solstad Offshore go up and down completely randomly.
Pair Corralation between Atresmedia and Solstad Offshore
Assuming the 90 days trading horizon Atresmedia is expected to generate 1.41 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Atresmedia is 3.48 times less risky than Solstad Offshore. It trades about 0.08 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,069 in Solstad Offshore ASA on August 24, 2024 and sell it today you would earn a total of 861.00 from holding Solstad Offshore ASA or generate 28.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Atresmedia vs. Solstad Offshore ASA
Performance |
| Timeline |
| Atresmedia |
| Solstad Offshore ASA |
Atresmedia and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atresmedia and Solstad Offshore
The main advantage of trading using opposite Atresmedia and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atresmedia position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Atresmedia vs. Quadrise Plc | Atresmedia vs. Intuitive Investments Group | Atresmedia vs. European Metals Holdings | Atresmedia vs. Athelney Trust plc |
| Solstad Offshore vs. Quadrise Plc | Solstad Offshore vs. Intuitive Investments Group | Solstad Offshore vs. European Metals Holdings | Solstad Offshore vs. Athelney Trust plc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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