Correlation Between Ping An and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Solstad Offshore ASA, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Solstad Offshore.
Diversification Opportunities for Ping An and Solstad Offshore
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ping and Solstad is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance 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 Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Solstad Offshore go up and down completely randomly.
Pair Corralation between Ping An and Solstad Offshore
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.02 times more return on investment than Solstad Offshore. However, Ping An is 1.02 times more volatile than Solstad Offshore ASA. It trades about 0.07 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.02 per unit of risk. If you would invest 191.00 in Ping An Insurance on November 28, 2024 and sell it today you would earn a total of 379.00 from holding Ping An Insurance or generate 198.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ping An Insurance vs. Solstad Offshore ASA
Performance |
| Timeline |
| Ping An Insurance |
| Solstad Offshore ASA |
Ping An and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Solstad Offshore
The main advantage of trading using opposite Ping An and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. Nordic Semiconductor ASA | Ping An vs. Hua Hong Semiconductor | Ping An vs. Chalice Mining Limited | Ping An vs. Elmos Semiconductor SE |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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