Correlation Between SOLSTAD OFFSHORE and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and DFS Furniture.
Diversification Opportunities for SOLSTAD OFFSHORE and DFS Furniture
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOLSTAD and DFS is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and DFS Furniture go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and DFS Furniture
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to generate 0.93 times more return on investment than DFS Furniture. However, SOLSTAD OFFSHORE NK is 1.07 times less risky than DFS Furniture. It trades about -0.03 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about -0.03 per unit of risk. If you would invest 358.00 in SOLSTAD OFFSHORE NK on October 30, 2024 and sell it today you would lose (12.00) from holding SOLSTAD OFFSHORE NK or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. DFS Furniture PLC
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| DFS Furniture PLC |
SOLSTAD OFFSHORE and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and DFS Furniture
The main advantage of trading using opposite SOLSTAD OFFSHORE and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| SOLSTAD OFFSHORE vs. ELMOS SEMICONDUCTOR | SOLSTAD OFFSHORE vs. Semiconductor Manufacturing International | SOLSTAD OFFSHORE vs. Transport International Holdings | SOLSTAD OFFSHORE vs. Kaiser Aluminum |
| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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