Correlation Between Solstad Offshore and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and SHIP HEALTHCARE 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Solstad Offshore and SHIP HEALTHCARE 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 SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and SHIP HEALTHCARE.
Diversification Opportunities for Solstad Offshore and SHIP HEALTHCARE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solstad and SHIP is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Solstad Offshore and SHIP HEALTHCARE
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 2.65 times more return on investment than SHIP HEALTHCARE. However, Solstad Offshore is 2.65 times more volatile than SHIP HEALTHCARE HLDGINC. It trades about 0.19 of its potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about -0.1 per unit of risk. If you would invest 270.00 in Solstad Offshore ASA on August 29, 2024 and sell it today you would earn a total of 95.00 from holding Solstad Offshore ASA or generate 35.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Solstad Offshore ASA |
| SHIP HEALTHCARE HLDGINC |
Solstad Offshore and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and SHIP HEALTHCARE
The main advantage of trading using opposite Solstad Offshore and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, SHIP HEALTHCARE 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| Solstad Offshore vs. ZIM Integrated Shipping | Solstad Offshore vs. Superior Plus Corp | Solstad Offshore vs. NMI Holdings | Solstad Offshore vs. SIVERS SEMICONDUCTORS AB |
| SHIP HEALTHCARE vs. Becton Dickinson and | SHIP HEALTHCARE vs. HOYA Corporation | SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |