Correlation Between Solstad Offshore and Intuitive Investments

Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and Intuitive Investments 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 Solstad Offshore and Intuitive Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Solstad Offshore ASA and Intuitive Investments Group, you can compare the effects of market volatilities on Solstad Offshore and Intuitive Investments 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 Solstad Offshore with a short position of Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Intuitive Investments.

Diversification Opportunities for Solstad Offshore and Intuitive Investments

-0.49

Correlation Coefficient

Solstad Offshore  Intuitive Investments

Very good diversification

The 3 months correlation between Solstad and Intuitive is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments and Solstad Offshore 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 Solstad Offshore ASA are associated (or correlated) with Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and Intuitive Investments go up and down completely randomly.

Pair Corralation between Solstad Offshore and Intuitive Investments

Assuming the 90 days trading horizon Solstad Offshore ASA is expected to generate 1.56 times more return on investment than Intuitive Investments. However, Solstad Offshore is 1.56 times more volatile than Intuitive Investments Group. It trades about 0.1 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.02 per unit of risk. If you would invest  3,441  in Solstad Offshore ASA on October 6, 2024 and sell it today you would earn a total of  695.00  from holding Solstad Offshore ASA or generate 20.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Solstad Offshore ASA  vs.  Intuitive Investments Group

Solstad Offshore ASA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Solstad Offshore ASA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Solstad Offshore unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Solstad Offshore and Intuitive Investments

The main advantage of trading using opposite Solstad Offshore and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' long position.

The idea behind Solstad Offshore ASA and Intuitive Investments Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.