Correlation Between Federal National and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Federal National 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 Federal National and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal National Mortgage and Solstad Offshore ASA, you can compare the effects of market volatilities on Federal National 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 Federal National with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and Solstad Offshore.
Diversification Opportunities for Federal National and Solstad Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage 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 Federal National 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 Federal National Mortgage 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 Federal National i.e., Federal National and Solstad Offshore go up and down completely randomly.
Pair Corralation between Federal National and Solstad Offshore
If you would invest 115.00 in Federal National Mortgage on August 31, 2024 and sell it today you would earn a total of 201.00 from holding Federal National Mortgage or generate 174.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal National Mortgage vs. Solstad Offshore ASA
Performance |
| Timeline |
| Federal National Mortgage |
| Solstad Offshore ASA |
Federal National and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and Solstad Offshore
The main advantage of trading using opposite Federal National and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National 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.| Federal National vs. Q2 Holdings | Federal National vs. National CineMedia | Federal National vs. CDW Corp | Federal National vs. Cimpress NV |
| Solstad Offshore vs. ON Semiconductor | Solstad Offshore vs. Uranium Energy Corp | Solstad Offshore vs. Arm Holdings plc | Solstad Offshore vs. Aerofoam Metals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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