Correlation Between SOLSTAD OFFSHORE and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES 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 SINGAPORE AIRLINES, you can compare the effects of market volatilities on SOLSTAD OFFSHORE and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and SINGAPORE AIRLINES.
Diversification Opportunities for SOLSTAD OFFSHORE and SINGAPORE AIRLINES
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOLSTAD and SINGAPORE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and SINGAPORE AIRLINES
Assuming the 90 days horizon SOLSTAD OFFSHORE NK is expected to generate 4.88 times more return on investment than SINGAPORE AIRLINES. However, SOLSTAD OFFSHORE is 4.88 times more volatile than SINGAPORE AIRLINES. It trades about 0.29 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.04 per unit of risk. If you would invest 270.00 in SOLSTAD OFFSHORE NK on September 3, 2024 and sell it today you would earn a total of 88.00 from holding SOLSTAD OFFSHORE NK or generate 32.59% 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. SINGAPORE AIRLINES
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| SINGAPORE AIRLINES |
SOLSTAD OFFSHORE and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and SINGAPORE AIRLINES
The main advantage of trading using opposite SOLSTAD OFFSHORE and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE position performs unexpectedly, SINGAPORE AIRLINES 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 SINGAPORE AIRLINES will offset losses from the drop in SINGAPORE AIRLINES'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 |
| SINGAPORE AIRLINES vs. REVO INSURANCE SPA | SINGAPORE AIRLINES vs. ALBIS LEASING AG | SINGAPORE AIRLINES vs. Evolution Mining Limited | SINGAPORE AIRLINES vs. PT Bank Maybank |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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