Correlation Between SOLSTAD OFFSHORE and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and Booking Holdings 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 Booking Holdings 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 Booking Holdings, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and Booking Holdings 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 Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and Booking Holdings.
Diversification Opportunities for SOLSTAD OFFSHORE and Booking Holdings
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SOLSTAD and Booking is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings 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 Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and Booking Holdings go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and Booking Holdings
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to generate 2.17 times more return on investment than Booking Holdings. However, SOLSTAD OFFSHORE is 2.17 times more volatile than Booking Holdings. It trades about 0.05 of its potential returns per unit of risk. Booking Holdings is currently generating about 0.11 per unit of risk. If you would invest 214.00 in SOLSTAD OFFSHORE NK on August 31, 2024 and sell it today you would earn a total of 146.00 from holding SOLSTAD OFFSHORE NK or generate 68.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. Booking Holdings
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| Booking Holdings |
SOLSTAD OFFSHORE and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and Booking Holdings
The main advantage of trading using opposite SOLSTAD OFFSHORE and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| SOLSTAD OFFSHORE vs. UNIVERSAL MUSIC GROUP | SOLSTAD OFFSHORE vs. Cardinal Health | SOLSTAD OFFSHORE vs. CVS Health | SOLSTAD OFFSHORE vs. GUARDANT HEALTH CL |
| Booking Holdings vs. Li Ning Company | Booking Holdings vs. Trip Group Limited | Booking Holdings vs. Superior Plus Corp | Booking Holdings vs. NMI Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |