Correlation Between Solstad Offshore and SAFETY MEDICAL
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and SAFETY MEDICAL 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 SAFETY MEDICAL 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 SAFETY MEDICAL PROD, you can compare the effects of market volatilities on Solstad Offshore and SAFETY MEDICAL 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 SAFETY MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and SAFETY MEDICAL.
Diversification Opportunities for Solstad Offshore and SAFETY MEDICAL
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solstad and SAFETY is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and SAFETY MEDICAL PROD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFETY MEDICAL PROD 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 SAFETY MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFETY MEDICAL PROD has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and SAFETY MEDICAL go up and down completely randomly.
Pair Corralation between Solstad Offshore and SAFETY MEDICAL
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 2.14 times more return on investment than SAFETY MEDICAL. However, Solstad Offshore is 2.14 times more volatile than SAFETY MEDICAL PROD. It trades about 0.21 of its potential returns per unit of risk. SAFETY MEDICAL PROD is currently generating about -0.14 per unit of risk. If you would invest 276.00 in Solstad Offshore ASA on September 2, 2024 and sell it today you would earn a total of 73.00 from holding Solstad Offshore ASA or generate 26.45% 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. SAFETY MEDICAL PROD
Performance |
| Timeline |
| Solstad Offshore ASA |
| SAFETY MEDICAL PROD |
Solstad Offshore and SAFETY MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and SAFETY MEDICAL
The main advantage of trading using opposite Solstad Offshore and SAFETY MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, SAFETY MEDICAL 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 SAFETY MEDICAL will offset losses from the drop in SAFETY MEDICAL's long position.| Solstad Offshore vs. CN MODERN DAIRY | Solstad Offshore vs. CAL MAINE FOODS | Solstad Offshore vs. JJ SNACK FOODS | Solstad Offshore vs. Austevoll Seafood ASA |
| SAFETY MEDICAL vs. SIVERS SEMICONDUCTORS AB | SAFETY MEDICAL vs. Darden Restaurants | SAFETY MEDICAL vs. Reliance Steel Aluminum | SAFETY MEDICAL vs. Q2M Managementberatung AG |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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