Correlation Between Equinor ASA and Stabilis Solutions
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Stabilis Solutions 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 Equinor ASA and Stabilis Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA ADR and Stabilis Solutions, you can compare the effects of market volatilities on Equinor ASA and Stabilis Solutions 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 Equinor ASA with a short position of Stabilis Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Stabilis Solutions.
Diversification Opportunities for Equinor ASA and Stabilis Solutions
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equinor and Stabilis is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and Stabilis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stabilis Solutions and Equinor 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 Equinor ASA ADR are associated (or correlated) with Stabilis Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stabilis Solutions has no effect on the direction of Equinor ASA i.e., Equinor ASA and Stabilis Solutions go up and down completely randomly.
Pair Corralation between Equinor ASA and Stabilis Solutions
Given the investment horizon of 90 days Equinor ASA is expected to generate 9.57 times less return on investment than Stabilis Solutions. But when comparing it to its historical volatility, Equinor ASA ADR is 1.99 times less risky than Stabilis Solutions. It trades about 0.01 of its potential returns per unit of risk. Stabilis Solutions is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 461.00 in Stabilis Solutions on October 24, 2024 and sell it today you would earn a total of 212.00 from holding Stabilis Solutions or generate 45.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinor ASA ADR vs. Stabilis Solutions
Performance |
| Timeline |
| Equinor ASA ADR |
| Stabilis Solutions |
Equinor ASA and Stabilis Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Stabilis Solutions
The main advantage of trading using opposite Equinor ASA and Stabilis Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Stabilis Solutions 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 Stabilis Solutions will offset losses from the drop in Stabilis Solutions' long position.| Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR | Equinor ASA vs. Galp Energa |
| Stabilis Solutions vs. Equinor ASA ADR | Stabilis Solutions vs. TotalEnergies SE ADR | Stabilis Solutions vs. Ecopetrol SA ADR | Stabilis Solutions vs. National Fuel Gas |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |