Correlation Between SOLSTAD OFFSHORE and Compugroup Medical
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and Compugroup Medical 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 Compugroup Medical 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 Compugroup Medical SE, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and Compugroup Medical 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 Compugroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and Compugroup Medical.
Diversification Opportunities for SOLSTAD OFFSHORE and Compugroup Medical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOLSTAD and Compugroup is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical 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 Compugroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugroup Medical has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and Compugroup Medical go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and Compugroup Medical
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to generate 1.57 times more return on investment than Compugroup Medical. However, SOLSTAD OFFSHORE is 1.57 times more volatile than Compugroup Medical SE. It trades about 0.29 of its potential returns per unit of risk. Compugroup Medical SE is currently generating about 0.0 per unit of risk. If you would invest 254.00 in SOLSTAD OFFSHORE NK on August 29, 2024 and sell it today you would earn a total of 89.00 from holding SOLSTAD OFFSHORE NK or generate 35.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. Compugroup Medical SE
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| Compugroup Medical |
SOLSTAD OFFSHORE and Compugroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and Compugroup Medical
The main advantage of trading using opposite SOLSTAD OFFSHORE and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, Compugroup Medical 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 Compugroup Medical will offset losses from the drop in Compugroup Medical's long position.| SOLSTAD OFFSHORE vs. Superior Plus Corp | SOLSTAD OFFSHORE vs. NMI Holdings | SOLSTAD OFFSHORE vs. Origin Agritech | SOLSTAD OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| Compugroup Medical vs. PTT Global Chemical | Compugroup Medical vs. NIPPON STEEL SPADR | Compugroup Medical vs. COSMOSTEEL HLDGS | Compugroup Medical vs. Khiron Life Sciences |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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