Correlation Between Cornish Metals and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Solstad Offshore ASA, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Solstad Offshore.
Diversification Opportunities for Cornish Metals and Solstad Offshore
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cornish and Solstad is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals 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 Cornish Metals 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 Cornish Metals 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 Cornish Metals i.e., Cornish Metals and Solstad Offshore go up and down completely randomly.
Pair Corralation between Cornish Metals and Solstad Offshore
Assuming the 90 days trading horizon Cornish Metals is expected to generate 0.84 times more return on investment than Solstad Offshore. However, Cornish Metals is 1.19 times less risky than Solstad Offshore. It trades about 0.22 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.05 per unit of risk. If you would invest 835.00 in Cornish Metals on October 12, 2024 and sell it today you would earn a total of 90.00 from holding Cornish Metals or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. Solstad Offshore ASA
Performance |
| Timeline |
| Cornish Metals |
| Solstad Offshore ASA |
Cornish Metals and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Solstad Offshore
The main advantage of trading using opposite Cornish Metals and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.| Cornish Metals vs. Zegona Communications Plc | Cornish Metals vs. Omega Healthcare Investors | Cornish Metals vs. Induction Healthcare Group | Cornish Metals vs. Inspiration Healthcare Group |
| Solstad Offshore vs. Adriatic Metals | Solstad Offshore vs. Atalaya Mining | Solstad Offshore vs. PPHE Hotel Group | Solstad Offshore vs. Cornish Metals |
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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