Correlation Between Magnora ASA and Solstad Offsho
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Solstad Offsho 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 Magnora ASA and Solstad Offsho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Solstad Offsho, you can compare the effects of market volatilities on Magnora ASA and Solstad Offsho 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 Magnora ASA with a short position of Solstad Offsho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Solstad Offsho.
Diversification Opportunities for Magnora ASA and Solstad Offsho
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magnora and Solstad is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Solstad Offsho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offsho and Magnora ASA 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 Magnora ASA are associated (or correlated) with Solstad Offsho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offsho has no effect on the direction of Magnora ASA i.e., Magnora ASA and Solstad Offsho go up and down completely randomly.
Pair Corralation between Magnora ASA and Solstad Offsho
Assuming the 90 days trading horizon Magnora ASA is expected to generate 10.6 times less return on investment than Solstad Offsho. But when comparing it to its historical volatility, Magnora ASA is 1.78 times less risky than Solstad Offsho. It trades about 0.01 of its potential returns per unit of risk. Solstad Offsho is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,195 in Solstad Offsho on August 25, 2024 and sell it today you would earn a total of 1,805 from holding Solstad Offsho or generate 82.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Solstad Offsho
Performance |
| Timeline |
| Magnora ASA |
| Solstad Offsho |
Magnora ASA and Solstad Offsho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Solstad Offsho
The main advantage of trading using opposite Magnora ASA and Solstad Offsho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Solstad Offsho 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 Offsho will offset losses from the drop in Solstad Offsho's long position.| Magnora ASA vs. Aker Horizons AS | Magnora ASA vs. REC Silicon ASA | Magnora ASA vs. Vow ASA | Magnora ASA vs. Saga Pure ASA |
| Solstad Offsho vs. Havila Shipping ASA | Solstad Offsho vs. Prosafe SE | Solstad Offsho vs. Eidesvik Offshore ASA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |