Correlation Between Carnegie Clean and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean 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 Carnegie Clean and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Clean Energy and Solstad Offshore ASA, you can compare the effects of market volatilities on Carnegie Clean 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 Carnegie Clean with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Solstad Offshore.
Diversification Opportunities for Carnegie Clean and Solstad Offshore
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Carnegie and Solstad is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy 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 Carnegie Clean 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 Carnegie Clean Energy 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 Carnegie Clean i.e., Carnegie Clean and Solstad Offshore go up and down completely randomly.
Pair Corralation between Carnegie Clean and Solstad Offshore
Assuming the 90 days trading horizon Carnegie Clean is expected to generate 3.8 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Carnegie Clean Energy is 1.47 times less risky than Solstad Offshore. It trades about 0.03 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Solstad Offshore ASA on September 12, 2024 and sell it today you would earn a total of 45.00 from holding Solstad Offshore ASA or generate 15.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Carnegie Clean Energy vs. Solstad Offshore ASA
Performance |
Timeline |
Carnegie Clean Energy |
Solstad Offshore ASA |
Carnegie Clean and Solstad Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carnegie Clean and Solstad Offshore
The main advantage of trading using opposite Carnegie Clean and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean 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.Carnegie Clean vs. Superior Plus Corp | Carnegie Clean vs. SIVERS SEMICONDUCTORS AB | Carnegie Clean vs. Norsk Hydro ASA | Carnegie Clean vs. Reliance Steel Aluminum |
Solstad Offshore vs. Columbia Sportswear | Solstad Offshore vs. PARKEN Sport Entertainment | Solstad Offshore vs. Sunny Optical Technology | Solstad Offshore vs. Micron Technology |
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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