Correlation Between FIREWEED METALS and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both FIREWEED METALS 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 FIREWEED METALS and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIREWEED METALS P and Solstad Offshore ASA, you can compare the effects of market volatilities on FIREWEED METALS 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 FIREWEED METALS with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIREWEED METALS and Solstad Offshore.
Diversification Opportunities for FIREWEED METALS and Solstad Offshore
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between FIREWEED and Solstad is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P 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 FIREWEED METALS 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 FIREWEED METALS P 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 FIREWEED METALS i.e., FIREWEED METALS and Solstad Offshore go up and down completely randomly.
Pair Corralation between FIREWEED METALS and Solstad Offshore
Assuming the 90 days horizon FIREWEED METALS P is expected to generate 2.11 times more return on investment than Solstad Offshore. However, FIREWEED METALS is 2.11 times more volatile than Solstad Offshore ASA. It trades about 0.13 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about -0.17 per unit of risk. If you would invest 101.00 in FIREWEED METALS P on November 28, 2024 and sell it today you would earn a total of 10.00 from holding FIREWEED METALS P or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIREWEED METALS P vs. Solstad Offshore ASA
Performance |
| Timeline |
| FIREWEED METALS P |
| Solstad Offshore ASA |
FIREWEED METALS and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIREWEED METALS and Solstad Offshore
The main advantage of trading using opposite FIREWEED METALS and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIREWEED METALS 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.| FIREWEED METALS vs. Mitsubishi Materials | FIREWEED METALS vs. NAGOYA RAILROAD | FIREWEED METALS vs. THRACE PLASTICS | FIREWEED METALS vs. Kaufman Broad SA |
| Solstad Offshore vs. Take Two Interactive Software | Solstad Offshore vs. Major Drilling Group | Solstad Offshore vs. Guidewire Software | Solstad Offshore vs. ATOSS SOFTWARE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |