Correlation Between Solstad Offshore and Maschinenfabrik Berthold
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Maschinenfabrik Berthold 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 Maschinenfabrik Berthold 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 Maschinenfabrik Berthold Hermle, you can compare the effects of market volatilities on Solstad Offshore and Maschinenfabrik Berthold 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 Maschinenfabrik Berthold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Maschinenfabrik Berthold.
Diversification Opportunities for Solstad Offshore and Maschinenfabrik Berthold
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solstad and Maschinenfabrik is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Maschinenfabrik Berthold Herml in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maschinenfabrik Berthold 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 Maschinenfabrik Berthold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maschinenfabrik Berthold has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Maschinenfabrik Berthold go up and down completely randomly.
Pair Corralation between Solstad Offshore and Maschinenfabrik Berthold
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 2.29 times more return on investment than Maschinenfabrik Berthold. However, Solstad Offshore is 2.29 times more volatile than Maschinenfabrik Berthold Hermle. It trades about 0.02 of its potential returns per unit of risk. Maschinenfabrik Berthold Hermle is currently generating about -0.16 per unit of risk. If you would invest 337.00 in Solstad Offshore ASA on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Solstad Offshore ASA or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Maschinenfabrik Berthold Herml
Performance |
| Timeline |
| Solstad Offshore ASA |
| Maschinenfabrik Berthold |
Solstad Offshore and Maschinenfabrik Berthold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Maschinenfabrik Berthold
The main advantage of trading using opposite Solstad Offshore and Maschinenfabrik Berthold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Maschinenfabrik Berthold 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 Maschinenfabrik Berthold will offset losses from the drop in Maschinenfabrik Berthold'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 |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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