Correlation Between Solstad Offsho and Cadeler As
Can any of the company-specific risk be diversified away by investing in both Solstad Offsho and Cadeler As 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 Offsho and Cadeler As into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solstad Offsho and Cadeler As, you can compare the effects of market volatilities on Solstad Offsho and Cadeler As 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 Offsho with a short position of Cadeler As. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offsho and Cadeler As.
Diversification Opportunities for Solstad Offsho and Cadeler As
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solstad and Cadeler is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offsho and Cadeler As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler As and Solstad Offsho 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 Offsho are associated (or correlated) with Cadeler As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler As has no effect on the direction of Solstad Offsho i.e., Solstad Offsho and Cadeler As go up and down completely randomly.
Pair Corralation between Solstad Offsho and Cadeler As
Assuming the 90 days trading horizon Solstad Offsho is expected to generate 1.1 times more return on investment than Cadeler As. However, Solstad Offsho is 1.1 times more volatile than Cadeler As. It trades about -0.27 of its potential returns per unit of risk. Cadeler As is currently generating about -0.38 per unit of risk. If you would invest 4,040 in Solstad Offsho on December 1, 2024 and sell it today you would lose (440.00) from holding Solstad Offsho or give up 10.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offsho vs. Cadeler As
Performance |
| Timeline |
| Solstad Offsho |
| Cadeler As |
Solstad Offsho and Cadeler As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offsho and Cadeler As
The main advantage of trading using opposite Solstad Offsho and Cadeler As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offsho position performs unexpectedly, Cadeler As 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 Cadeler As will offset losses from the drop in Cadeler As' long position.| Solstad Offsho vs. Havila Shipping ASA | Solstad Offsho vs. Prosafe SE | Solstad Offsho vs. Eidesvik Offshore ASA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |