Correlation Between Solstad Offshore and Vodka Brands
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Vodka Brands 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 Vodka Brands 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 Vodka Brands Corp, you can compare the effects of market volatilities on Solstad Offshore and Vodka Brands 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 Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Vodka Brands.
Diversification Opportunities for Solstad Offshore and Vodka Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Solstad and Vodka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Vodka Brands go up and down completely randomly.
Pair Corralation between Solstad Offshore and Vodka Brands
Assuming the 90 days horizon Solstad Offshore is expected to generate 1.12 times less return on investment than Vodka Brands. But when comparing it to its historical volatility, Solstad Offshore ASA is 1.81 times less risky than Vodka Brands. It trades about 0.04 of its potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Vodka Brands Corp on August 30, 2024 and sell it today you would lose (88.00) from holding Vodka Brands Corp or give up 44.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Vodka Brands Corp
Performance |
| Timeline |
| Solstad Offshore ASA |
| Vodka Brands Corp |
Solstad Offshore and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Vodka Brands
The main advantage of trading using opposite Solstad Offshore and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.| Solstad Offshore vs. Radcom | Solstad Offshore vs. Senmiao Technology | Solstad Offshore vs. Fossil Group | Solstad Offshore vs. Canlan Ice Sports |
| Vodka Brands vs. Aristocrat Group Corp | Vodka Brands vs. Naked Wines plc | Vodka Brands vs. Willamette Valley Vineyards | Vodka Brands vs. Andrew Peller Limited |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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