Correlation Between Compagnie Plastic and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Solstad Offshore ASA, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Solstad Offshore.
Diversification Opportunities for Compagnie Plastic and Solstad Offshore
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Compagnie and Solstad is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium 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 Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and Solstad Offshore go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Solstad Offshore
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 1.17 times more return on investment than Solstad Offshore. However, Compagnie Plastic is 1.17 times more volatile than Solstad Offshore ASA. It trades about 0.34 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about -0.12 per unit of risk. If you would invest 829.00 in Compagnie Plastic Omnium on September 28, 2024 and sell it today you would earn a total of 141.00 from holding Compagnie Plastic Omnium or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Solstad Offshore ASA
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Solstad Offshore ASA |
Compagnie Plastic and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Solstad Offshore
The main advantage of trading using opposite Compagnie Plastic and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. CHIBA BANK | Compagnie Plastic vs. Tradegate AG Wertpapierhandelsbank | Compagnie Plastic vs. JSC Halyk bank | Compagnie Plastic vs. Commonwealth Bank of |
| Solstad Offshore vs. AP Mller | Solstad Offshore vs. AP Mller | Solstad Offshore vs. ZIM Integrated Shipping | Solstad Offshore vs. DFDS AS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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