Correlation Between National Atomic and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both National Atomic 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 National Atomic and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Atomic Co and Solstad Offshore ASA, you can compare the effects of market volatilities on National Atomic 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 National Atomic with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Atomic and Solstad Offshore.
Diversification Opportunities for National Atomic and Solstad Offshore
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Solstad is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding National Atomic Co 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 National Atomic 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 National Atomic Co 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 National Atomic i.e., National Atomic and Solstad Offshore go up and down completely randomly.
Pair Corralation between National Atomic and Solstad Offshore
Assuming the 90 days trading horizon National Atomic Co is expected to generate 0.85 times more return on investment than Solstad Offshore. However, National Atomic Co is 1.17 times less risky than Solstad Offshore. It trades about 0.09 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.04 per unit of risk. If you would invest 3,700 in National Atomic Co on November 3, 2024 and sell it today you would earn a total of 115.00 from holding National Atomic Co or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Atomic Co vs. Solstad Offshore ASA
Performance |
| Timeline |
| National Atomic |
| Solstad Offshore ASA |
National Atomic and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Atomic and Solstad Offshore
The main advantage of trading using opposite National Atomic and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Atomic 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.| National Atomic vs. Summit Materials Cl | National Atomic vs. JB Hunt Transport | National Atomic vs. Compagnie Plastic Omnium | National Atomic vs. JD Sports Fashion |
| Solstad Offshore vs. Zegona Communications Plc | Solstad Offshore vs. Universal Display Corp | Solstad Offshore vs. Summit Materials Cl | Solstad Offshore vs. Darden Restaurants |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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