Correlation Between Solstad Offsho and Shelf Drilling
Can any of the company-specific risk be diversified away by investing in both Solstad Offsho and Shelf Drilling 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 Solstad Offsho and Shelf Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solstad Offsho and Shelf Drilling, you can compare the effects of market volatilities on Solstad Offsho and Shelf Drilling 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 Solstad Offsho with a short position of Shelf Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offsho and Shelf Drilling.
Diversification Opportunities for Solstad Offsho and Shelf Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Solstad and Shelf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offsho and Shelf Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelf Drilling and Solstad Offsho 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 Solstad Offsho are associated (or correlated) with Shelf Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelf Drilling has no effect on the direction of Solstad Offsho i.e., Solstad Offsho and Shelf Drilling go up and down completely randomly.
Pair Corralation between Solstad Offsho and Shelf Drilling
Assuming the 90 days trading horizon Solstad Offsho is expected to generate 1.49 times less return on investment than Shelf Drilling. In addition to that, Solstad Offsho is 1.15 times more volatile than Shelf Drilling. It trades about 0.01 of its total potential returns per unit of risk. Shelf Drilling is currently generating about 0.02 per unit of volatility. If you would invest 2,720 in Shelf Drilling on December 4, 2024 and sell it today you would earn a total of 180.00 from holding Shelf Drilling or generate 6.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Solstad Offsho vs. Shelf Drilling
Performance |
Timeline |
Solstad Offsho |
Shelf Drilling |
Solstad Offsho and Shelf Drilling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Solstad Offsho and Shelf Drilling
The main advantage of trading using opposite Solstad Offsho and Shelf Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offsho position performs unexpectedly, Shelf Drilling 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 Shelf Drilling will offset losses from the drop in Shelf Drilling's long position.Solstad Offsho vs. Havila Shipping ASA | Solstad Offsho vs. Prosafe SE | Solstad Offsho vs. Eidesvik Offshore ASA |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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