Correlation Between Solstad Offshore and Montea Comm
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Montea Comm 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 Montea Comm 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 Montea Comm VA, you can compare the effects of market volatilities on Solstad Offshore and Montea Comm 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 Montea Comm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Montea Comm.
Diversification Opportunities for Solstad Offshore and Montea Comm
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solstad and Montea is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Montea Comm VA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montea Comm VA 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 Montea Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montea Comm VA has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Montea Comm go up and down completely randomly.
Pair Corralation between Solstad Offshore and Montea Comm
Assuming the 90 days trading horizon Solstad Offshore is expected to generate 3.3 times less return on investment than Montea Comm. In addition to that, Solstad Offshore is 1.23 times more volatile than Montea Comm VA. It trades about 0.04 of its total potential returns per unit of risk. Montea Comm VA is currently generating about 0.15 per unit of volatility. If you would invest 6,330 in Montea Comm VA on November 3, 2024 and sell it today you would earn a total of 320.00 from holding Montea Comm VA or generate 5.06% 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. Montea Comm VA
Performance |
| Timeline |
| Solstad Offshore ASA |
| Montea Comm VA |
Solstad Offshore and Montea Comm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Montea Comm
The main advantage of trading using opposite Solstad Offshore and Montea Comm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Montea Comm 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 Montea Comm will offset losses from the drop in Montea Comm's long position.| Solstad Offshore vs. Apollo Investment Corp | Solstad Offshore vs. Gol Intelligent Airlines | Solstad Offshore vs. WisdomTree Investments | Solstad Offshore vs. CDL INVESTMENT |
| Montea Comm vs. Extra Space Storage | Montea Comm vs. REXFORD INDREALTY DL 01 | Montea Comm vs. CubeSmart | Montea Comm vs. First Industrial Realty |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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