Correlation Between AOYAMA TRADING and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING 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 AOYAMA TRADING and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and Solstad Offshore ASA, you can compare the effects of market volatilities on AOYAMA TRADING 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 AOYAMA TRADING with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and Solstad Offshore.
Diversification Opportunities for AOYAMA TRADING and Solstad Offshore
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AOYAMA and Solstad is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING i.e., AOYAMA TRADING and Solstad Offshore go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and Solstad Offshore
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 1.14 times more return on investment than Solstad Offshore. However, AOYAMA TRADING is 1.14 times more volatile than Solstad Offshore ASA. It trades about 0.08 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.02 per unit of risk. If you would invest 306.00 in AOYAMA TRADING on September 3, 2024 and sell it today you would earn a total of 1,104 from holding AOYAMA TRADING or generate 360.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. Solstad Offshore ASA
Performance |
| Timeline |
| AOYAMA TRADING |
| Solstad Offshore ASA |
AOYAMA TRADING and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and Solstad Offshore
The main advantage of trading using opposite AOYAMA TRADING and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING 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.| AOYAMA TRADING vs. CVW CLEANTECH INC | AOYAMA TRADING vs. Brockhaus Capital Management | AOYAMA TRADING vs. SOFI TECHNOLOGIES | AOYAMA TRADING vs. Cardinal Health |
| Solstad Offshore vs. Liberty Broadband | Solstad Offshore vs. CHINA EDUCATION GROUP | Solstad Offshore vs. BROADSTNET LEADL 00025 | Solstad Offshore vs. EEDUCATION ALBERT AB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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