Correlation Between COSCO SHIPPING and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING 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 COSCO SHIPPING and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSCO SHIPPING Holdings and Solstad Offshore ASA, you can compare the effects of market volatilities on COSCO SHIPPING 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 COSCO SHIPPING with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Solstad Offshore.
Diversification Opportunities for COSCO SHIPPING and Solstad Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between COSCO and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings 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 COSCO SHIPPING 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 COSCO SHIPPING Holdings 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 COSCO SHIPPING i.e., COSCO SHIPPING and Solstad Offshore go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and Solstad Offshore
Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to generate 1.01 times more return on investment than Solstad Offshore. However, COSCO SHIPPING is 1.01 times more volatile than Solstad Offshore ASA. It trades about 0.07 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.06 per unit of risk. If you would invest 90.00 in COSCO SHIPPING Holdings on August 29, 2024 and sell it today you would earn a total of 54.00 from holding COSCO SHIPPING Holdings or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 70.83% |
| Values | Daily Returns |
COSCO SHIPPING Holdings vs. Solstad Offshore ASA
Performance |
| Timeline |
| COSCO SHIPPING Holdings |
| Solstad Offshore ASA |
COSCO SHIPPING and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and Solstad Offshore
The main advantage of trading using opposite COSCO SHIPPING and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING 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.| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. Pacific Basin Shipping | COSCO SHIPPING vs. SITC International Holdings |
| Solstad Offshore vs. AP Moeller Maersk AS | Solstad Offshore vs. AP Mller | Solstad Offshore vs. AP Moeller | Solstad Offshore vs. COSCO SHIPPING 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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