Correlation Between Solstad Offshore and United Natural
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and United Natural 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 United Natural 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 United Natural Foods, you can compare the effects of market volatilities on Solstad Offshore and United Natural 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 United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and United Natural.
Diversification Opportunities for Solstad Offshore and United Natural
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solstad and United is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods 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 United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and United Natural go up and down completely randomly.
Pair Corralation between Solstad Offshore and United Natural
Assuming the 90 days trading horizon Solstad Offshore is expected to generate 2.1 times less return on investment than United Natural. But when comparing it to its historical volatility, Solstad Offshore ASA is 1.09 times less risky than United Natural. It trades about 0.12 of its potential returns per unit of risk. United Natural Foods is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,851 in United Natural Foods on September 13, 2024 and sell it today you would earn a total of 981.00 from holding United Natural Foods or generate 53.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. United Natural Foods
Performance |
| Timeline |
| Solstad Offshore ASA |
| United Natural Foods |
Solstad Offshore and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and United Natural
The main advantage of trading using opposite Solstad Offshore and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, United Natural 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 United Natural will offset losses from the drop in United Natural's long position.| Solstad Offshore vs. Superior Plus Corp | Solstad Offshore vs. SIVERS SEMICONDUCTORS AB | Solstad Offshore vs. CHINA HUARONG ENERHD 50 | Solstad Offshore vs. NORDIC HALIBUT AS |
| United Natural vs. Metro AG | United Natural vs. Superior Plus Corp | United Natural vs. SIVERS SEMICONDUCTORS AB | United Natural vs. NorAm Drilling AS |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |