Correlation Between HAPAG-LLOYD UNSPADR and Solstad Offshore

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both HAPAG-LLOYD UNSPADR 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 HAPAG-LLOYD UNSPADR and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAPAG LLOYD UNSPADR 12 and Solstad Offshore ASA, you can compare the effects of market volatilities on HAPAG-LLOYD UNSPADR 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 HAPAG-LLOYD UNSPADR with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAPAG-LLOYD UNSPADR and Solstad Offshore.

Diversification Opportunities for HAPAG-LLOYD UNSPADR and Solstad Offshore

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between HAPAG-LLOYD and Solstad is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding HAPAG LLOYD UNSPADR 12 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 HAPAG-LLOYD UNSPADR 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 HAPAG LLOYD UNSPADR 12 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 HAPAG-LLOYD UNSPADR i.e., HAPAG-LLOYD UNSPADR and Solstad Offshore go up and down completely randomly.

Pair Corralation between HAPAG-LLOYD UNSPADR and Solstad Offshore

Assuming the 90 days trading horizon HAPAG-LLOYD UNSPADR is expected to generate 2.12 times less return on investment than Solstad Offshore. In addition to that, HAPAG-LLOYD UNSPADR is 1.47 times more volatile than Solstad Offshore ASA. It trades about 0.03 of its total potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.09 per unit of volatility. If you would invest  337.00  in Solstad Offshore ASA on October 9, 2024 and sell it today you would earn a total of  10.00  from holding Solstad Offshore ASA or generate 2.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

HAPAG LLOYD UNSPADR 12  vs.  Solstad Offshore ASA

 Performance 
       Timeline  
HAPAG LLOYD UNSPADR 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in HAPAG LLOYD UNSPADR 12 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, HAPAG-LLOYD UNSPADR reported solid returns over the last few months and may actually be approaching a breakup point.
Solstad Offshore ASA 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Solstad Offshore ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Solstad Offshore unveiled solid returns over the last few months and may actually be approaching a breakup point.

HAPAG-LLOYD UNSPADR and Solstad Offshore Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HAPAG-LLOYD UNSPADR and Solstad Offshore

The main advantage of trading using opposite HAPAG-LLOYD UNSPADR and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAPAG-LLOYD UNSPADR 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 HAPAG LLOYD UNSPADR 12 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

Other Complementary Tools

Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios