Correlation Between Artisan Partners and Solstad Offshore

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

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

Diversification Opportunities for Artisan Partners and Solstad Offshore

0.0

Correlation Coefficient

Artisan Partners  Solstad Offshore

Pay attention - limited upside

The 3 months correlation between Artisan and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset 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 Artisan Partners 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 Artisan Partners Asset 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 Artisan Partners i.e., Artisan Partners and Solstad Offshore go up and down completely randomly.

Pair Corralation between Artisan Partners and Solstad Offshore

Given the investment horizon of 90 days Artisan Partners is expected to generate 1.84 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Artisan Partners Asset is 2.59 times less risky than Solstad Offshore. It trades about 0.06 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  151.00  in Solstad Offshore ASA on September 21, 2024 and sell it today you would earn a total of  158.00  from holding Solstad Offshore ASA or generate 104.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Artisan Partners Asset  vs.  Solstad Offshore ASA

Artisan Partners Asset

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Artisan Partners is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Solstad Offshore ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solstad Offshore ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Solstad Offshore is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Artisan Partners and Solstad Offshore

The main advantage of trading using opposite Artisan Partners and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners 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.

The idea behind Artisan Partners Asset and Solstad Offshore ASA 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.