Correlation Between Australian Agricultural and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural 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 Australian Agricultural and SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on Australian Agricultural 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 Australian Agricultural with a short position of SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and SOLSTAD OFFSHORE.
Diversification Opportunities for Australian Agricultural and SOLSTAD OFFSHORE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and SOLSTAD is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE and Australian Agricultural 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 Australian Agricultural 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 has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between Australian Agricultural and SOLSTAD OFFSHORE
Assuming the 90 days horizon Australian Agricultural is expected to under-perform the SOLSTAD OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, Australian Agricultural is 1.98 times less risky than SOLSTAD OFFSHORE. The stock trades about -0.03 of its potential returns per unit of risk. The SOLSTAD OFFSHORE NK is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 354.00 in SOLSTAD OFFSHORE NK on September 1, 2024 and sell it today you would lose (4.00) from holding SOLSTAD OFFSHORE NK or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| Australian Agricultural |
| SOLSTAD OFFSHORE |
Australian Agricultural and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and SOLSTAD OFFSHORE
The main advantage of trading using opposite Australian Agricultural and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural 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.| Australian Agricultural vs. SalMar ASA | Australian Agricultural vs. Superior Plus Corp | Australian Agricultural vs. NMI Holdings | Australian Agricultural vs. Origin Agritech |
| SOLSTAD OFFSHORE vs. Clarkson PLC | SOLSTAD OFFSHORE vs. Wilh Wilhelmsen Holding | SOLSTAD OFFSHORE vs. Superior Plus Corp | SOLSTAD OFFSHORE vs. NMI Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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