Correlation Between Solstad Offshore and Mizuno
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Mizuno 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 Mizuno 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 Mizuno, you can compare the effects of market volatilities on Solstad Offshore and Mizuno 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 Mizuno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Mizuno.
Diversification Opportunities for Solstad Offshore and Mizuno
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Solstad and Mizuno is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Mizuno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizuno 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 Mizuno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizuno has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Mizuno go up and down completely randomly.
Pair Corralation between Solstad Offshore and Mizuno
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 1.75 times more return on investment than Mizuno. However, Solstad Offshore is 1.75 times more volatile than Mizuno. It trades about 0.24 of its potential returns per unit of risk. Mizuno is currently generating about 0.16 per unit of risk. If you would invest 268.00 in Solstad Offshore ASA on September 4, 2024 and sell it today you would earn a total of 81.00 from holding Solstad Offshore ASA or generate 30.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Mizuno
Performance |
| Timeline |
| Solstad Offshore ASA |
| Mizuno |
Solstad Offshore and Mizuno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Mizuno
The main advantage of trading using opposite Solstad Offshore and Mizuno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Mizuno 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 Mizuno will offset losses from the drop in Mizuno's long position.| Solstad Offshore vs. Wilh Wilhelmsen Holding | Solstad Offshore vs. Superior Plus Corp | Solstad Offshore vs. NMI Holdings | Solstad Offshore vs. Origin Agritech |
| Mizuno vs. Solstad Offshore ASA | Mizuno vs. BlueScope Steel Limited | Mizuno vs. Harmony Gold Mining | Mizuno vs. CSSC Offshore Marine |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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