Correlation Between NURAN WIRELESS and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both NURAN WIRELESS 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 NURAN WIRELESS and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NURAN WIRELESS INC and Solstad Offshore ASA, you can compare the effects of market volatilities on NURAN WIRELESS 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 NURAN WIRELESS with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NURAN WIRELESS and Solstad Offshore.
Diversification Opportunities for NURAN WIRELESS and Solstad Offshore
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NURAN and Solstad is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NURAN WIRELESS INC 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 NURAN WIRELESS 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 NURAN WIRELESS INC 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 NURAN WIRELESS i.e., NURAN WIRELESS and Solstad Offshore go up and down completely randomly.
Pair Corralation between NURAN WIRELESS and Solstad Offshore
Assuming the 90 days trading horizon NURAN WIRELESS INC is expected to generate 3.37 times more return on investment than Solstad Offshore. However, NURAN WIRELESS is 3.37 times more volatile than Solstad Offshore ASA. It trades about 0.04 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about -0.02 per unit of risk. If you would invest 4.18 in NURAN WIRELESS INC on December 29, 2024 and sell it today you would earn a total of 0.08 from holding NURAN WIRELESS INC or generate 1.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NURAN WIRELESS INC vs. Solstad Offshore ASA
Performance |
Timeline |
NURAN WIRELESS INC |
Solstad Offshore ASA |
NURAN WIRELESS and Solstad Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NURAN WIRELESS and Solstad Offshore
The main advantage of trading using opposite NURAN WIRELESS and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NURAN WIRELESS 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.NURAN WIRELESS vs. Comba Telecom Systems | NURAN WIRELESS vs. Spirent Communications plc | NURAN WIRELESS vs. Merit Medical Systems | NURAN WIRELESS vs. COMPUGROUP MEDICAL V |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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