Correlation Between SHIP HEALTHCARE and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and Solstad Offshore ASA, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Solstad Offshore.
Diversification Opportunities for SHIP HEALTHCARE and Solstad Offshore
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SHIP and Solstad is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Solstad Offshore go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Solstad Offshore
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 0.71 times more return on investment than Solstad Offshore. However, SHIP HEALTHCARE HLDGINC is 1.41 times less risky than Solstad Offshore. It trades about 0.03 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.01 per unit of risk. If you would invest 1,098 in SHIP HEALTHCARE HLDGINC on September 1, 2024 and sell it today you would earn a total of 232.00 from holding SHIP HEALTHCARE HLDGINC or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Solstad Offshore ASA
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Solstad Offshore ASA |
SHIP HEALTHCARE and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Solstad Offshore
The main advantage of trading using opposite SHIP HEALTHCARE and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. EVS Broadcast Equipment | SHIP HEALTHCARE vs. PARKEN Sport Entertainment | SHIP HEALTHCARE vs. PT Global Mediacom | SHIP HEALTHCARE vs. NTG Nordic Transport |
| Solstad Offshore vs. Tradeweb Markets | Solstad Offshore vs. National Retail Properties | Solstad Offshore vs. Zoom Video Communications | Solstad Offshore vs. Auto Trader 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 Stocks Directory module to find actively traded stocks across global markets.
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