Correlation Between Solstad Offshore and Blackstone
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Blackstone 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 Blackstone 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 Blackstone Group, you can compare the effects of market volatilities on Solstad Offshore and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Blackstone.
Diversification Opportunities for Solstad Offshore and Blackstone
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Solstad and Blackstone is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Blackstone go up and down completely randomly.
Pair Corralation between Solstad Offshore and Blackstone
Assuming the 90 days trading horizon Solstad Offshore is expected to generate 1.26 times less return on investment than Blackstone. In addition to that, Solstad Offshore is 1.83 times more volatile than Blackstone Group. It trades about 0.05 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.12 per unit of volatility. If you would invest 9,604 in Blackstone Group on September 4, 2024 and sell it today you would earn a total of 8,516 from holding Blackstone Group or generate 88.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Blackstone Group
Performance |
| Timeline |
| Solstad Offshore ASA |
| Blackstone Group |
Solstad Offshore and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Blackstone
The main advantage of trading using opposite Solstad Offshore and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| Solstad Offshore vs. BW LPG Limited | Solstad Offshore vs. Wilh Wilhelmsen Holding | Solstad Offshore vs. Superior Plus Corp | Solstad Offshore vs. NMI Holdings |
| Blackstone vs. Lion One Metals | Blackstone vs. Jacquet Metal Service | Blackstone vs. Summit Hotel Properties | Blackstone vs. Scandinavian Tobacco Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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