Correlation Between Endur ASA and Solstad Offsho
Can any of the company-specific risk be diversified away by investing in both Endur 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 Endur 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 Endur ASA and Solstad Offsho, you can compare the effects of market volatilities on Endur 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 Endur ASA with a short position of Solstad Offsho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endur ASA and Solstad Offsho.
Diversification Opportunities for Endur ASA and Solstad Offsho
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Endur and Solstad is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Endur ASA and Solstad Offsho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offsho and Endur 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 Endur 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 Endur ASA i.e., Endur ASA and Solstad Offsho go up and down completely randomly.
Pair Corralation between Endur ASA and Solstad Offsho
Assuming the 90 days trading horizon Endur ASA is expected to generate 1.46 times less return on investment than Solstad Offsho. But when comparing it to its historical volatility, Endur ASA is 1.67 times less risky than Solstad Offsho. It trades about 0.09 of its potential returns per unit of risk. Solstad Offsho is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,195 in Solstad Offsho on August 25, 2024 and sell it today you would earn a total of 1,805 from holding Solstad Offsho or generate 82.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endur ASA vs. Solstad Offsho
Performance |
| Timeline |
| Endur ASA |
| Solstad Offsho |
Endur ASA and Solstad Offsho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endur ASA and Solstad Offsho
The main advantage of trading using opposite Endur ASA and Solstad Offsho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endur 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.| Endur ASA vs. Magnora ASA | Endur ASA vs. Next Biometrics Group | Endur ASA vs. Idex ASA | Endur ASA vs. Eidesvik Offshore ASA |
| Solstad Offsho vs. Havila Shipping ASA | Solstad Offsho vs. Prosafe SE | Solstad Offsho vs. Eidesvik Offshore ASA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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