Correlation Between Solstad Offshore and Materialise
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Materialise 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 Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solstad Offshore ASA and Materialise NV, you can compare the effects of market volatilities on Solstad Offshore and Materialise 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 Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Materialise.
Diversification Opportunities for Solstad Offshore and Materialise
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solstad and Materialise is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV 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 ASA are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Materialise go up and down completely randomly.
Pair Corralation between Solstad Offshore and Materialise
Assuming the 90 days trading horizon Solstad Offshore is expected to generate 2165.67 times less return on investment than Materialise. But when comparing it to its historical volatility, Solstad Offshore ASA is 1.88 times less risky than Materialise. It trades about 0.0 of its potential returns per unit of risk. Materialise NV is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 745.00 in Materialise NV on November 8, 2024 and sell it today you would earn a total of 105.00 from holding Materialise NV or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Materialise NV
Performance |
| Timeline |
| Solstad Offshore ASA |
| Materialise NV |
Solstad Offshore and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Materialise
The main advantage of trading using opposite Solstad Offshore and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| Solstad Offshore vs. Jacquet Metal Service | Solstad Offshore vs. Ebro Foods SA | Solstad Offshore vs. PREMIER FOODS | Solstad Offshore vs. PLANT VEDA FOODS |
| Materialise vs. SAFEROADS HLDGS | Materialise vs. Fidelity National Information | Materialise vs. Northern Data AG | Materialise vs. INFORMATION SVC GRP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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