Correlation Between Visa and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Solstad Offshore ASA, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Solstad Offshore.
Diversification Opportunities for Visa and Solstad Offshore
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Solstad is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Solstad Offshore go up and down completely randomly.
Pair Corralation between Visa and Solstad Offshore
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.47 times more return on investment than Solstad Offshore. However, Visa Class A is 2.11 times less risky than Solstad Offshore. It trades about 0.44 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.04 per unit of risk. If you would invest 31,440 in Visa Class A on November 3, 2024 and sell it today you would earn a total of 2,740 from holding Visa Class A or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Visa Class A vs. Solstad Offshore ASA
Performance |
| Timeline |
| Visa Class A |
| Solstad Offshore ASA |
Visa and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Solstad Offshore
The main advantage of trading using opposite Visa and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Solstad Offshore vs. Zegona Communications Plc | Solstad Offshore vs. Universal Display Corp | Solstad Offshore vs. Summit Materials Cl | Solstad Offshore vs. Darden Restaurants |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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