Correlation Between Solstad Offshore and NEXEN

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Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and NEXEN 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 NEXEN 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 NEXEN INC 64, you can compare the effects of market volatilities on Solstad Offshore and NEXEN 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 NEXEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and NEXEN.

Diversification Opportunities for Solstad Offshore and NEXEN

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Solstad and NEXEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and NEXEN INC 64 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXEN INC 64 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 NEXEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXEN INC 64 has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and NEXEN go up and down completely randomly.

Pair Corralation between Solstad Offshore and NEXEN

If you would invest  309.00  in Solstad Offshore ASA on December 1, 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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy23.81%
ValuesDaily Returns

Solstad Offshore ASA  vs.  NEXEN INC 64

 Performance 
       Timeline  
Solstad Offshore ASA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Solstad Offshore ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Solstad Offshore is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
NEXEN INC 64 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days NEXEN INC 64 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for NEXEN INC 64 investors.

Solstad Offshore and NEXEN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Solstad Offshore and NEXEN

The main advantage of trading using opposite Solstad Offshore and NEXEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, NEXEN 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 NEXEN will offset losses from the drop in NEXEN's long position.
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The idea behind Solstad Offshore ASA and NEXEN INC 64 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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