Correlation Between Telenor ASA and Solstad Offsho
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Solstad Offsho 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 Telenor ASA and Solstad Offsho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and Solstad Offsho, you can compare the effects of market volatilities on Telenor ASA and Solstad Offsho 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 Telenor ASA with a short position of Solstad Offsho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Solstad Offsho.
Diversification Opportunities for Telenor ASA and Solstad Offsho
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telenor and Solstad is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and Solstad Offsho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offsho and Telenor ASA 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 Telenor ASA are associated (or correlated) with Solstad Offsho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offsho has no effect on the direction of Telenor ASA i.e., Telenor ASA and Solstad Offsho go up and down completely randomly.
Pair Corralation between Telenor ASA and Solstad Offsho
Assuming the 90 days trading horizon Telenor ASA is expected to generate 2.82 times less return on investment than Solstad Offsho. But when comparing it to its historical volatility, Telenor ASA is 3.41 times less risky than Solstad Offsho. It trades about 0.07 of its potential returns per unit of risk. Solstad Offsho is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,336 in Solstad Offsho on August 31, 2024 and sell it today you would earn a total of 1,858 from holding Solstad Offsho or generate 79.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. Solstad Offsho
Performance |
| Timeline |
| Telenor ASA |
| Solstad Offsho |
Telenor ASA and Solstad Offsho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Solstad Offsho
The main advantage of trading using opposite Telenor ASA and Solstad Offsho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Solstad Offsho 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 Solstad Offsho will offset losses from the drop in Solstad Offsho's long position.| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
| Solstad Offsho vs. Havila Shipping ASA | Solstad Offsho vs. Prosafe SE | Solstad Offsho vs. Eidesvik Offshore ASA |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |