Correlation Between Granite Construction and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Granite Construction 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 Granite Construction and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and Solstad Offshore ASA, you can compare the effects of market volatilities on Granite Construction 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 Granite Construction with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Solstad Offshore.
Diversification Opportunities for Granite Construction and Solstad Offshore
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Granite and Solstad is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction 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 Granite Construction 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 Granite Construction 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 Granite Construction i.e., Granite Construction and Solstad Offshore go up and down completely randomly.
Pair Corralation between Granite Construction and Solstad Offshore
Assuming the 90 days trading horizon Granite Construction is expected to under-perform the Solstad Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Granite Construction is 2.35 times less risky than Solstad Offshore. The stock trades about -0.1 of its potential returns per unit of risk. The Solstad Offshore ASA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Solstad Offshore ASA on October 17, 2024 and sell it today you would earn a total of 20.00 from holding Solstad Offshore ASA or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. Solstad Offshore ASA
Performance |
| Timeline |
| Granite Construction |
| Solstad Offshore ASA |
Granite Construction and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Solstad Offshore
The main advantage of trading using opposite Granite Construction and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction 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.| Granite Construction vs. VIVA WINE GROUP | Granite Construction vs. PennantPark Investment | Granite Construction vs. TOREX SEMICONDUCTOR LTD | Granite Construction vs. Scottish Mortgage Investment |
| Solstad Offshore vs. NorAm Drilling AS | Solstad Offshore vs. Daito Trust Construction | Solstad Offshore vs. Granite Construction | Solstad Offshore vs. BORR DRILLING NEW |
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
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |