Correlation Between Solstad Offshore and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Solstad Offshore and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and KIMBALL ELECTRONICS.
Diversification Opportunities for Solstad Offshore and KIMBALL ELECTRONICS
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Solstad and KIMBALL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Solstad Offshore and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 1.38 times more return on investment than KIMBALL ELECTRONICS. However, Solstad Offshore is 1.38 times more volatile than KIMBALL ELECTRONICS. It trades about 0.04 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.08 per unit of risk. If you would invest 332.00 in Solstad Offshore ASA on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Solstad Offshore ASA or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Solstad Offshore ASA |
| KIMBALL ELECTRONICS |
Solstad Offshore and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and KIMBALL ELECTRONICS
The main advantage of trading using opposite Solstad Offshore and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.| Solstad Offshore vs. AP Mller | Solstad Offshore vs. AP Mller | Solstad Offshore vs. HAPAG LLOYD UNSPADR 12 | Solstad Offshore vs. ZIM Integrated Shipping |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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