Correlation Between SOLSTAD OFFSHORE and BANKINTER ADR
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and BANKINTER ADR 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 BANKINTER ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOLSTAD OFFSHORE NK and BANKINTER ADR 2007, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and BANKINTER ADR 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 BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and BANKINTER ADR.
Diversification Opportunities for SOLSTAD OFFSHORE and BANKINTER ADR
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOLSTAD and BANKINTER is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 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 NK are associated (or correlated) with BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and BANKINTER ADR go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and BANKINTER ADR
Assuming the 90 days horizon SOLSTAD OFFSHORE is expected to generate 1.15 times less return on investment than BANKINTER ADR. In addition to that, SOLSTAD OFFSHORE is 1.82 times more volatile than BANKINTER ADR 2007. It trades about 0.07 of its total potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.15 per unit of volatility. If you would invest 715.00 in BANKINTER ADR 2007 on October 14, 2024 and sell it today you would earn a total of 30.00 from holding BANKINTER ADR 2007 or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. BANKINTER ADR 2007
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| BANKINTER ADR 2007 |
SOLSTAD OFFSHORE and BANKINTER ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and BANKINTER ADR
The main advantage of trading using opposite SOLSTAD OFFSHORE and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, BANKINTER ADR 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 BANKINTER ADR will offset losses from the drop in BANKINTER ADR's long position.| SOLSTAD OFFSHORE vs. G8 EDUCATION | SOLSTAD OFFSHORE vs. DeVry Education Group | SOLSTAD OFFSHORE vs. EEDUCATION ALBERT AB | SOLSTAD OFFSHORE vs. Hisense Home Appliances |
| BANKINTER ADR vs. Sixt Leasing SE | BANKINTER ADR vs. ecotel communication ag | BANKINTER ADR vs. TOWNSQUARE MEDIA INC | BANKINTER ADR vs. China Communications Services |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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