Correlation Between Beowulf Mining and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Beowulf Mining 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 Beowulf Mining and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beowulf Mining and Solstad Offshore ASA, you can compare the effects of market volatilities on Beowulf Mining 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 Beowulf Mining with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beowulf Mining and Solstad Offshore.
Diversification Opportunities for Beowulf Mining and Solstad Offshore
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beowulf and Solstad is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining i.e., Beowulf Mining and Solstad Offshore go up and down completely randomly.
Pair Corralation between Beowulf Mining and Solstad Offshore
Assuming the 90 days trading horizon Beowulf Mining is expected to under-perform the Solstad Offshore. In addition to that, Beowulf Mining is 1.12 times more volatile than Solstad Offshore ASA. It trades about -0.07 of its total potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.13 per unit of volatility. If you would invest 3,138 in Solstad Offshore ASA on October 26, 2024 and sell it today you would earn a total of 940.00 from holding Solstad Offshore ASA or generate 29.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beowulf Mining vs. Solstad Offshore ASA
Performance |
| Timeline |
| Beowulf Mining |
| Solstad Offshore ASA |
Beowulf Mining and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beowulf Mining and Solstad Offshore
The main advantage of trading using opposite Beowulf Mining and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beowulf Mining 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.| Beowulf Mining vs. Givaudan SA | Beowulf Mining vs. Antofagasta PLC | Beowulf Mining vs. Ferrexpo PLC | Beowulf Mining vs. Atalaya Mining |
| Solstad Offshore vs. Amedeo Air Four | Solstad Offshore vs. New Residential Investment | Solstad Offshore vs. Bankers Investment Trust | Solstad Offshore vs. Seraphim Space Investment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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