Correlation Between CHINA HUARONG and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG 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 CHINA HUARONG and SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on CHINA HUARONG 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 CHINA HUARONG with a short position of SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and SOLSTAD OFFSHORE.
Diversification Opportunities for CHINA HUARONG and SOLSTAD OFFSHORE
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHINA and SOLSTAD is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE and CHINA HUARONG 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 CHINA HUARONG ENERHD 50 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 CHINA HUARONG i.e., CHINA HUARONG and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between CHINA HUARONG and SOLSTAD OFFSHORE
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to under-perform the SOLSTAD OFFSHORE. In addition to that, CHINA HUARONG is 2.79 times more volatile than SOLSTAD OFFSHORE NK. It trades about -0.03 of its total potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about 0.23 per unit of volatility. If you would invest 263.00 in SOLSTAD OFFSHORE NK on September 13, 2024 and sell it today you would earn a total of 67.00 from holding SOLSTAD OFFSHORE NK or generate 25.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| SOLSTAD OFFSHORE |
CHINA HUARONG and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and SOLSTAD OFFSHORE
The main advantage of trading using opposite CHINA HUARONG and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG 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.| CHINA HUARONG vs. WILLIS LEASE FIN | CHINA HUARONG vs. SAFETY MEDICAL PROD | CHINA HUARONG vs. AVITA Medical | CHINA HUARONG vs. CarsalesCom |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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