Correlation Between SOLSTAD OFFSHORE and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Energy, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and COSCO SHIPPING.
Diversification Opportunities for SOLSTAD OFFSHORE and COSCO SHIPPING
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOLSTAD and COSCO is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Energy has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and COSCO SHIPPING
Assuming the 90 days horizon SOLSTAD OFFSHORE is expected to generate 1.37 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, SOLSTAD OFFSHORE NK is 1.54 times less risky than COSCO SHIPPING. It trades about 0.21 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 57.00 in COSCO SHIPPING Energy on September 12, 2024 and sell it today you would earn a total of 18.00 from holding COSCO SHIPPING Energy or generate 31.58% 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. COSCO SHIPPING Energy
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| COSCO SHIPPING Energy |
SOLSTAD OFFSHORE and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and COSCO SHIPPING
The main advantage of trading using opposite SOLSTAD OFFSHORE and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| SOLSTAD OFFSHORE vs. Superior Plus Corp | SOLSTAD OFFSHORE vs. SIVERS SEMICONDUCTORS AB | SOLSTAD OFFSHORE vs. CHINA HUARONG ENERHD 50 | SOLSTAD OFFSHORE vs. NORDIC HALIBUT AS |
| COSCO SHIPPING vs. FAST RETAIL ADR | COSCO SHIPPING vs. Transportadora de Gas | COSCO SHIPPING vs. Tradeweb Markets | COSCO SHIPPING vs. CANON MARKETING JP |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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