Correlation Between Solstad Offshore and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and WuXi AppTec 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 WuXi AppTec 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 WuXi AppTec Co, you can compare the effects of market volatilities on Solstad Offshore and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and WuXi AppTec.
Diversification Opportunities for Solstad Offshore and WuXi AppTec
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solstad and WuXi is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and WuXi AppTec go up and down completely randomly.
Pair Corralation between Solstad Offshore and WuXi AppTec
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 1.22 times more return on investment than WuXi AppTec. However, Solstad Offshore is 1.22 times more volatile than WuXi AppTec Co. It trades about 0.21 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.11 per unit of risk. If you would invest 258.00 in Solstad Offshore ASA on September 14, 2024 and sell it today you would earn a total of 67.00 from holding Solstad Offshore ASA or generate 25.97% 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. WuXi AppTec Co
Performance |
| Timeline |
| Solstad Offshore ASA |
| WuXi AppTec |
Solstad Offshore and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and WuXi AppTec
The main advantage of trading using opposite Solstad Offshore and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec'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 |
| WuXi AppTec vs. GALENA MINING LTD | WuXi AppTec vs. QURATE RETAIL INC | WuXi AppTec vs. Canon Marketing Japan | WuXi AppTec vs. FLOW TRADERS LTD |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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