Correlation Between ArcelorMittal and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal 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 ArcelorMittal and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA ADR and Solstad Offshore ASA, you can compare the effects of market volatilities on ArcelorMittal 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 ArcelorMittal with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Solstad Offshore.
Diversification Opportunities for ArcelorMittal and Solstad Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ArcelorMittal and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR 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 ArcelorMittal 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 ArcelorMittal SA ADR 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 ArcelorMittal i.e., ArcelorMittal and Solstad Offshore go up and down completely randomly.
Pair Corralation between ArcelorMittal and Solstad Offshore
Allowing for the 90-day total investment horizon ArcelorMittal is expected to generate 17.73 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, ArcelorMittal SA ADR is 3.6 times less risky than Solstad Offshore. It trades about 0.01 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Solstad Offshore ASA on September 3, 2024 and sell it today you would earn a total of 158.00 from holding Solstad Offshore ASA or generate 104.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Solstad Offshore ASA
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Solstad Offshore ASA |
ArcelorMittal and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Solstad Offshore
The main advantage of trading using opposite ArcelorMittal and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal 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.| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
| Solstad Offshore vs. Hapag Lloyd Aktiengesellschaft | Solstad Offshore vs. COSCO SHIPPING Holdings | Solstad Offshore vs. Nippon Yusen Kabushiki | Solstad Offshore vs. Orient Overseas Limited |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| 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 | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |