Correlation Between SOLSTAD OFFSHORE and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and FLOW TRADERS.
Diversification Opportunities for SOLSTAD OFFSHORE and FLOW TRADERS
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOLSTAD and FLOW is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and FLOW TRADERS go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and FLOW TRADERS
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to under-perform the FLOW TRADERS. In addition to that, SOLSTAD OFFSHORE is 1.57 times more volatile than FLOW TRADERS LTD. It trades about 0.0 of its total potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.03 per unit of volatility. If you would invest 1,996 in FLOW TRADERS LTD on September 3, 2024 and sell it today you would earn a total of 116.00 from holding FLOW TRADERS LTD or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. FLOW TRADERS LTD
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| FLOW TRADERS LTD |
SOLSTAD OFFSHORE and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and FLOW TRADERS
The main advantage of trading using opposite SOLSTAD OFFSHORE and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| SOLSTAD OFFSHORE vs. Auto Trader Group | SOLSTAD OFFSHORE vs. Tradeweb Markets | SOLSTAD OFFSHORE vs. Vastned Retail NV | SOLSTAD OFFSHORE vs. Canon Marketing Japan |
| FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Goldman Sachs | FLOW TRADERS vs. The Goldman Sachs | FLOW TRADERS vs. Superior Plus Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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