Correlation Between Bristow and Solaris Energy
Can any of the company-specific risk be diversified away by investing in both Bristow and Solaris Energy 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 Bristow and Solaris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristow Group and Solaris Energy Infrastructure,, you can compare the effects of market volatilities on Bristow and Solaris Energy 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 Bristow with a short position of Solaris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristow and Solaris Energy.
Diversification Opportunities for Bristow and Solaris Energy
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bristow and Solaris is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and Solaris Energy Infrastructure, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solaris Energy Infra and Bristow 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 Bristow Group are associated (or correlated) with Solaris Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solaris Energy Infra has no effect on the direction of Bristow i.e., Bristow and Solaris Energy go up and down completely randomly.
Pair Corralation between Bristow and Solaris Energy
Given the investment horizon of 90 days Bristow Group is expected to under-perform the Solaris Energy. But the stock apears to be less risky and, when comparing its historical volatility, Bristow Group is 1.47 times less risky than Solaris Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Solaris Energy Infrastructure, is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Solaris Energy Infrastructure, on September 2, 2024 and sell it today you would earn a total of 1,265 from holding Solaris Energy Infrastructure, or generate 105.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristow Group vs. Solaris Energy Infrastructure,
Performance |
| Timeline |
| Bristow Group |
| Solaris Energy Infra |
Bristow and Solaris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristow and Solaris Energy
The main advantage of trading using opposite Bristow and Solaris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristow position performs unexpectedly, Solaris Energy 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 Solaris Energy will offset losses from the drop in Solaris Energy's long position.| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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