Correlation Between FEMALE HEALTH and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and Solstad Offshore ASA, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Solstad Offshore.
Diversification Opportunities for FEMALE HEALTH and Solstad Offshore
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEMALE and Solstad is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and Solstad Offshore go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and Solstad Offshore
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 2.42 times more return on investment than Solstad Offshore. However, FEMALE HEALTH is 2.42 times more volatile than Solstad Offshore ASA. It trades about 0.09 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.11 per unit of risk. If you would invest 65.00 in FEMALE HEALTH on October 11, 2024 and sell it today you would earn a total of 4.00 from holding FEMALE HEALTH or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. Solstad Offshore ASA
Performance |
| Timeline |
| FEMALE HEALTH |
| Solstad Offshore ASA |
FEMALE HEALTH and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and Solstad Offshore
The main advantage of trading using opposite FEMALE HEALTH and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. PennantPark Investment | FEMALE HEALTH vs. AM EAGLE OUTFITTERS | FEMALE HEALTH vs. Scottish Mortgage Investment | FEMALE HEALTH vs. HK Electric Investments |
| Solstad Offshore vs. Dave Busters Entertainment | Solstad Offshore vs. FEMALE HEALTH | Solstad Offshore vs. NIGHTINGALE HEALTH EO | Solstad Offshore vs. Cardinal Health |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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