Correlation Between Solstad Offshore and Prestige Wealth
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Prestige Wealth 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 Prestige Wealth 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 Prestige Wealth Ordinary, you can compare the effects of market volatilities on Solstad Offshore and Prestige Wealth 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 Prestige Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Prestige Wealth.
Diversification Opportunities for Solstad Offshore and Prestige Wealth
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Solstad and Prestige is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Prestige Wealth Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Wealth Ordinary 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 Prestige Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Wealth Ordinary has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Prestige Wealth go up and down completely randomly.
Pair Corralation between Solstad Offshore and Prestige Wealth
Assuming the 90 days horizon Solstad Offshore is expected to generate 1.65 times less return on investment than Prestige Wealth. But when comparing it to its historical volatility, Solstad Offshore ASA is 3.62 times less risky than Prestige Wealth. It trades about 0.04 of its potential returns per unit of risk. Prestige Wealth Ordinary is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 540.00 in Prestige Wealth Ordinary on September 3, 2024 and sell it today you would lose (445.00) from holding Prestige Wealth Ordinary or give up 82.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 71.77% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Prestige Wealth Ordinary
Performance |
| Timeline |
| Solstad Offshore ASA |
| Prestige Wealth Ordinary |
Solstad Offshore and Prestige Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Prestige Wealth
The main advantage of trading using opposite Solstad Offshore and Prestige Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Prestige Wealth 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 Prestige Wealth will offset losses from the drop in Prestige Wealth's long position.| Solstad Offshore vs. Hapag Lloyd Aktiengesellschaft | Solstad Offshore vs. AP Moeller Maersk AS | Solstad Offshore vs. AP Mller | Solstad Offshore vs. COSCO SHIPPING Holdings |
| Prestige Wealth vs. RCS MediaGroup SpA | Prestige Wealth vs. Solstad Offshore ASA | Prestige Wealth vs. Western Digital | Prestige Wealth vs. Paysafe |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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