Correlation Between Peel Mining and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Peel 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 Peel 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 Peel Mining Limited and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on Peel 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 Peel Mining with a short position of SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and SOLSTAD OFFSHORE.
Diversification Opportunities for Peel Mining and SOLSTAD OFFSHORE
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Peel and SOLSTAD is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining Limited and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE and Peel 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 Peel Mining Limited 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 has no effect on the direction of Peel Mining i.e., Peel Mining and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between Peel Mining and SOLSTAD OFFSHORE
Assuming the 90 days horizon Peel Mining Limited is expected to under-perform the SOLSTAD OFFSHORE. In addition to that, Peel Mining is 1.3 times more volatile than SOLSTAD OFFSHORE NK. It trades about -0.02 of its total potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about 0.24 per unit of volatility. If you would invest 266.00 in SOLSTAD OFFSHORE NK on September 12, 2024 and sell it today you would earn a total of 73.00 from holding SOLSTAD OFFSHORE NK or generate 27.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining Limited vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| Peel Mining Limited |
| SOLSTAD OFFSHORE |
Peel Mining and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and SOLSTAD OFFSHORE
The main advantage of trading using opposite Peel Mining and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel 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.| Peel Mining vs. Pebblebrook Hotel Trust | Peel Mining vs. Summit Hotel Properties | Peel Mining vs. Park Hotels Resorts | Peel Mining vs. ATRYS HEALTH SA |
| SOLSTAD OFFSHORE vs. Superior Plus Corp | SOLSTAD OFFSHORE vs. SIVERS SEMICONDUCTORS AB | SOLSTAD OFFSHORE vs. CHINA HUARONG ENERHD 50 | SOLSTAD OFFSHORE vs. NORDIC HALIBUT AS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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