Correlation Between Veolia Environnement and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement 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 Veolia Environnement and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veolia Environnement VE and Solstad Offshore ASA, you can compare the effects of market volatilities on Veolia Environnement 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 Veolia Environnement with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Solstad Offshore.
Diversification Opportunities for Veolia Environnement and Solstad Offshore
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Veolia and Solstad is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE 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 Veolia Environnement 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 Veolia Environnement VE 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 Veolia Environnement i.e., Veolia Environnement and Solstad Offshore go up and down completely randomly.
Pair Corralation between Veolia Environnement and Solstad Offshore
Assuming the 90 days trading horizon Veolia Environnement is expected to generate 2.89 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Veolia Environnement VE is 3.65 times less risky than Solstad Offshore. It trades about 0.02 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,084 in Solstad Offshore ASA on October 11, 2024 and sell it today you would lose (64.00) from holding Solstad Offshore ASA or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Veolia Environnement VE vs. Solstad Offshore ASA
Performance |
| Timeline |
| Veolia Environnement |
| Solstad Offshore ASA |
Veolia Environnement and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and Solstad Offshore
The main advantage of trading using opposite Veolia Environnement and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement 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.| Veolia Environnement vs. UNIQA Insurance Group | Veolia Environnement vs. First Class Metals | Veolia Environnement vs. Fulcrum Metals PLC | Veolia Environnement vs. Golden Metal Resources |
| Solstad Offshore vs. Veolia Environnement VE | Solstad Offshore vs. Beowulf Mining | Solstad Offshore vs. Tata Steel Limited | Solstad Offshore vs. Thor Mining 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |