Correlation Between Discover Financial and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Discover Financial 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 Discover Financial and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Solstad Offshore ASA, you can compare the effects of market volatilities on Discover Financial 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 Discover Financial with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Solstad Offshore.
Diversification Opportunities for Discover Financial and Solstad Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Discover and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services 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 Discover Financial 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 Discover Financial Services 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 Discover Financial i.e., Discover Financial and Solstad Offshore go up and down completely randomly.
Pair Corralation between Discover Financial and Solstad Offshore
If you would invest 17,587 in Discover Financial Services on November 9, 2024 and sell it today you would earn a total of 2,685 from holding Discover Financial Services or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discover Financial Services vs. Solstad Offshore ASA
Performance |
| Timeline |
| Discover Financial |
| Solstad Offshore ASA |
Discover Financial and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and Solstad Offshore
The main advantage of trading using opposite Discover Financial and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial 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.| Discover Financial vs. Ally Financial | Discover Financial vs. Synchrony Financial | Discover Financial vs. Western Union Co | Discover Financial vs. Bread Financial Holdings |
| Solstad Offshore vs. Hapag Lloyd Aktiengesellschaft | Solstad Offshore vs. Hapag Lloyd Aktiengesellschaft | Solstad Offshore vs. AP Moeller Maersk AS | Solstad Offshore vs. AP Mller |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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