Correlation Between IShares Physical and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both IShares Physical 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 IShares Physical and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Silver and Solstad Offshore ASA, you can compare the effects of market volatilities on IShares Physical 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 IShares Physical with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Solstad Offshore.
Diversification Opportunities for IShares Physical and Solstad Offshore
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Solstad is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver 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 IShares Physical 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 iShares Physical Silver 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 IShares Physical i.e., IShares Physical and Solstad Offshore go up and down completely randomly.
Pair Corralation between IShares Physical and Solstad Offshore
Assuming the 90 days trading horizon iShares Physical Silver is expected to under-perform the Solstad Offshore. But the stock apears to be less risky and, when comparing its historical volatility, iShares Physical Silver is 2.94 times less risky than Solstad Offshore. The stock trades about -0.28 of its potential returns per unit of risk. The Solstad Offshore ASA is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,138 in Solstad Offshore ASA on August 29, 2024 and sell it today you would earn a total of 1,162 from holding Solstad Offshore ASA or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Physical Silver vs. Solstad Offshore ASA
Performance |
| Timeline |
| iShares Physical Silver |
| Solstad Offshore ASA |
IShares Physical and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and Solstad Offshore
The main advantage of trading using opposite IShares Physical and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical 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.| IShares Physical vs. Lendinvest PLC | IShares Physical vs. Neometals | IShares Physical vs. Coor Service Management | IShares Physical vs. Albion Technology General |
| Solstad Offshore vs. Lendinvest PLC | Solstad Offshore vs. Neometals | Solstad Offshore vs. Albion Technology General | Solstad Offshore vs. Jupiter Fund Management |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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