Correlation Between Safety Insurance and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Safety Insurance 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 Safety Insurance and SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on Safety Insurance 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 Safety Insurance with a short position of SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and SOLSTAD OFFSHORE.
Diversification Opportunities for Safety Insurance and SOLSTAD OFFSHORE
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safety and SOLSTAD is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE and Safety Insurance 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 Safety Insurance Group 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 has no effect on the direction of Safety Insurance i.e., Safety Insurance and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between Safety Insurance and SOLSTAD OFFSHORE
Assuming the 90 days horizon Safety Insurance Group is expected to under-perform the SOLSTAD OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, Safety Insurance Group is 1.81 times less risky than SOLSTAD OFFSHORE. The stock trades about -0.08 of its potential returns per unit of risk. The SOLSTAD OFFSHORE NK is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 337.00 in SOLSTAD OFFSHORE NK on October 22, 2024 and sell it today you would earn a total of 1.00 from holding SOLSTAD OFFSHORE NK or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| Safety Insurance |
| SOLSTAD OFFSHORE |
Safety Insurance and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and SOLSTAD OFFSHORE
The main advantage of trading using opposite Safety Insurance and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance 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.| Safety Insurance vs. Corporate Office Properties | Safety Insurance vs. alstria office REIT AG | Safety Insurance vs. The Home Depot | Safety Insurance vs. Tower One Wireless |
| SOLSTAD OFFSHORE vs. De Grey Mining | SOLSTAD OFFSHORE vs. Vienna Insurance Group | SOLSTAD OFFSHORE vs. MCEWEN MINING INC | SOLSTAD OFFSHORE vs. Safety Insurance Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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