Correlation Between Golden Matrix and Solstad Offshore

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

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

Diversification Opportunities for Golden Matrix and Solstad Offshore

0.0

Correlation Coefficient

Golden Matrix  Solstad Offshore

Pay attention - limited upside

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

Pair Corralation between Golden Matrix and Solstad Offshore

Given the investment horizon of 90 days Golden Matrix is expected to generate 2.02 times less return on investment than Solstad Offshore. In addition to that, Golden Matrix is 1.2 times more volatile than Solstad Offshore ASA. It trades about 0.02 of its total potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.04 per unit of volatility. 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

Golden Matrix Group  vs.  Solstad Offshore ASA

Golden Matrix Group

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 Golden Matrix and Solstad Offshore

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

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.