Correlation Between Solstad Offshore and Lithium Americas
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Lithium Americas 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 Solstad Offshore and Lithium Americas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solstad Offshore ASA and Lithium Americas Corp, you can compare the effects of market volatilities on Solstad Offshore and Lithium Americas 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 Solstad Offshore with a short position of Lithium Americas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Lithium Americas.
Diversification Opportunities for Solstad Offshore and Lithium Americas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Solstad and Lithium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Lithium Americas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Americas Corp and Solstad Offshore 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 Solstad Offshore ASA are associated (or correlated) with Lithium Americas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Americas Corp has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Lithium Americas go up and down completely randomly.
Pair Corralation between Solstad Offshore and Lithium Americas
If you would invest 309.00 in Solstad Offshore ASA on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Solstad Offshore ASA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Lithium Americas Corp
Performance |
| Timeline |
| Solstad Offshore ASA |
| Lithium Americas Corp |
Solstad Offshore and Lithium Americas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Lithium Americas
The main advantage of trading using opposite Solstad Offshore and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Lithium Americas 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 Lithium Americas will offset losses from the drop in Lithium Americas' long position.| Solstad Offshore vs. Kaltura | Solstad Offshore vs. Rackspace Technology | Solstad Offshore vs. United Homes Group | Solstad Offshore vs. Franklin Street Properties |
| Lithium Americas vs. Lipocine | Lithium Americas vs. Solstad Offshore ASA | Lithium Americas vs. Alvarium Tiedemann Holdings | Lithium Americas vs. Radcom |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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