Correlation Between Vodka Brands and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Vodka Brands 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 Vodka Brands and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodka Brands Corp and Solstad Offshore ASA, you can compare the effects of market volatilities on Vodka Brands 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 Vodka Brands with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodka Brands and Solstad Offshore.
Diversification Opportunities for Vodka Brands and Solstad Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vodka and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp 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 Vodka Brands 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 Vodka Brands Corp 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 Vodka Brands i.e., Vodka Brands and Solstad Offshore go up and down completely randomly.
Pair Corralation between Vodka Brands and Solstad Offshore
Given the investment horizon of 90 days Vodka Brands is expected to generate 5.91 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Vodka Brands Corp is 1.09 times less risky than Solstad Offshore. It trades about 0.01 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Solstad Offshore ASA on August 27, 2024 and sell it today you would earn a total of 158.00 from holding Solstad Offshore ASA or generate 104.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodka Brands Corp vs. Solstad Offshore ASA
Performance |
| Timeline |
| Vodka Brands Corp |
| Solstad Offshore ASA |
Vodka Brands and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodka Brands and Solstad Offshore
The main advantage of trading using opposite Vodka Brands and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands 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.| Vodka Brands vs. Diageo PLC ADR | Vodka Brands vs. Constellation Brands Class | Vodka Brands vs. Morningstar Unconstrained Allocation | Vodka Brands vs. SEI Investments |
| Solstad Offshore vs. AP Mller | Solstad Offshore vs. COSCO SHIPPING Holdings | Solstad Offshore vs. Orient Overseas Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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