Correlation Between Thor Mining and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Thor Mining and Solstad Offshore 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 Thor Mining and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Mining PLC and Solstad Offshore ASA, you can compare the effects of market volatilities on Thor Mining and Solstad Offshore 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 Thor Mining with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and Solstad Offshore.
Diversification Opportunities for Thor Mining and Solstad Offshore
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thor and Solstad is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA and Thor Mining 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 Thor Mining PLC are associated (or correlated) with Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Thor Mining i.e., Thor Mining and Solstad Offshore go up and down completely randomly.
Pair Corralation between Thor Mining and Solstad Offshore
Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the Solstad Offshore. In addition to that, Thor Mining is 1.16 times more volatile than Solstad Offshore ASA. It trades about -0.04 of its total potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.02 per unit of volatility. If you would invest 4,084 in Solstad Offshore ASA on October 11, 2024 and sell it today you would lose (64.00) from holding Solstad Offshore ASA or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Thor Mining PLC vs. Solstad Offshore ASA
Performance |
| Timeline |
| Thor Mining PLC |
| Solstad Offshore ASA |
Thor Mining and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and Solstad Offshore
The main advantage of trading using opposite Thor Mining and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, Solstad Offshore 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 Offshore will offset losses from the drop in Solstad Offshore's long position.| Thor Mining vs. Auto Trader Group | Thor Mining vs. Zoom Video Communications | Thor Mining vs. Ion Beam Applications | Thor Mining vs. Universal Display Corp |
| Solstad Offshore vs. Veolia Environnement VE | Solstad Offshore vs. Beowulf Mining | Solstad Offshore vs. Tata Steel Limited | Solstad Offshore vs. Thor Mining PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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