Correlation Between Solstad Offshore and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and LPKF Laser 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 LPKF Laser 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 LPKF Laser Electronics, you can compare the effects of market volatilities on Solstad Offshore and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and LPKF Laser.
Diversification Opportunities for Solstad Offshore and LPKF Laser
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solstad and LPKF is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and LPKF Laser go up and down completely randomly.
Pair Corralation between Solstad Offshore and LPKF Laser
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 1.66 times more return on investment than LPKF Laser. However, Solstad Offshore is 1.66 times more volatile than LPKF Laser Electronics. It trades about 0.03 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.01 per unit of risk. If you would invest 278.00 in Solstad Offshore ASA on September 3, 2024 and sell it today you would earn a total of 71.00 from holding Solstad Offshore ASA or generate 25.54% 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. LPKF Laser Electronics
Performance |
| Timeline |
| Solstad Offshore ASA |
| LPKF Laser Electronics |
Solstad Offshore and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and LPKF Laser
The main advantage of trading using opposite Solstad Offshore and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| Solstad Offshore vs. Liberty Broadband | Solstad Offshore vs. CHINA EDUCATION GROUP | Solstad Offshore vs. BROADSTNET LEADL 00025 | Solstad Offshore vs. EEDUCATION ALBERT AB |
| LPKF Laser vs. IDP EDUCATION LTD | LPKF Laser vs. EMBARK EDUCATION LTD | LPKF Laser vs. CAREER EDUCATION | LPKF Laser vs. Adtalem Global Education |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |