Correlation Between SOLSTAD OFFSHORE and HK Electric
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and HK Electric.
Diversification Opportunities for SOLSTAD OFFSHORE and HK Electric
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOLSTAD and HKT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and HK Electric go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and HK Electric
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to generate 5.39 times more return on investment than HK Electric. However, SOLSTAD OFFSHORE is 5.39 times more volatile than HK Electric Investments. It trades about -0.01 of its potential returns per unit of risk. HK Electric Investments is currently generating about -0.22 per unit of risk. If you would invest 342.00 in SOLSTAD OFFSHORE NK on November 7, 2024 and sell it today you would lose (2.00) from holding SOLSTAD OFFSHORE NK or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. HK Electric Investments
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| HK Electric Investments |
SOLSTAD OFFSHORE and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and HK Electric
The main advantage of trading using opposite SOLSTAD OFFSHORE and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| SOLSTAD OFFSHORE vs. Bio Techne Corp | SOLSTAD OFFSHORE vs. Addtech AB | SOLSTAD OFFSHORE vs. Northern Data AG | SOLSTAD OFFSHORE vs. Fidelity National Information |
| HK Electric vs. COSMOSTEEL HLDGS | HK Electric vs. Dentsply Sirona | HK Electric vs. TRADELINK ELECTRON | HK Electric vs. TRADEDOUBLER AB SK |
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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