Correlation Between Dno ASA and Solstad Offsho
Can any of the company-specific risk be diversified away by investing in both Dno ASA and Solstad Offsho 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 Dno ASA and Solstad Offsho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dno ASA and Solstad Offsho, you can compare the effects of market volatilities on Dno ASA and Solstad Offsho 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 Dno ASA with a short position of Solstad Offsho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Solstad Offsho.
Diversification Opportunities for Dno ASA and Solstad Offsho
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dno and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Solstad Offsho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offsho and Dno ASA 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 Dno ASA are associated (or correlated) with Solstad Offsho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offsho has no effect on the direction of Dno ASA i.e., Dno ASA and Solstad Offsho go up and down completely randomly.
Pair Corralation between Dno ASA and Solstad Offsho
Assuming the 90 days trading horizon Dno ASA is expected to under-perform the Solstad Offsho. But the stock apears to be less risky and, when comparing its historical volatility, Dno ASA is 1.8 times less risky than Solstad Offsho. The stock trades about -0.16 of its potential returns per unit of risk. The Solstad Offsho is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,386 in Solstad Offsho on September 3, 2024 and sell it today you would earn a total of 808.00 from holding Solstad Offsho or generate 23.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dno ASA vs. Solstad Offsho
Performance |
| Timeline |
| Dno ASA |
| Solstad Offsho |
Dno ASA and Solstad Offsho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dno ASA and Solstad Offsho
The main advantage of trading using opposite Dno ASA and Solstad Offsho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dno ASA position performs unexpectedly, Solstad Offsho 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 Offsho will offset losses from the drop in Solstad Offsho's long position.| Dno ASA vs. Aker Solutions ASA | Dno ASA vs. Storebrand ASA | Dno ASA vs. Frontline | Dno ASA vs. Subsea 7 SA |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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