Correlation Between SENECA FOODS-A and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A 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 SENECA FOODS-A and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SENECA FOODS A and Solstad Offshore ASA, you can compare the effects of market volatilities on SENECA FOODS-A 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 SENECA FOODS-A with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Solstad Offshore.
Diversification Opportunities for SENECA FOODS-A and Solstad Offshore
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SENECA and Solstad is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS 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 SENECA FOODS-A 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 SENECA FOODS 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 SENECA FOODS-A i.e., SENECA FOODS-A and Solstad Offshore go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Solstad Offshore
Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 1.54 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, SENECA FOODS A is 2.07 times less risky than Solstad Offshore. It trades about 0.28 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 278.00 in Solstad Offshore ASA on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Solstad Offshore ASA or generate 25.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Solstad Offshore ASA
Performance |
| Timeline |
| SENECA FOODS A |
| Solstad Offshore ASA |
SENECA FOODS-A and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Solstad Offshore
The main advantage of trading using opposite SENECA FOODS-A and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A 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.| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
| Solstad Offshore vs. Tradeweb Markets | Solstad Offshore vs. National Retail Properties | Solstad Offshore vs. Zoom Video Communications | Solstad Offshore vs. Auto Trader Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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