Correlation Between Stolt Nielsen and Solstad Offsho
Can any of the company-specific risk be diversified away by investing in both Stolt Nielsen and Solstad Offsho 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 Stolt Nielsen and Solstad Offsho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stolt Nielsen Limited and Solstad Offsho, you can compare the effects of market volatilities on Stolt Nielsen and Solstad Offsho 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 Stolt Nielsen with a short position of Solstad Offsho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stolt Nielsen and Solstad Offsho.
Diversification Opportunities for Stolt Nielsen and Solstad Offsho
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stolt and Solstad is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited and Solstad Offsho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offsho and Stolt Nielsen 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 Stolt Nielsen Limited are associated (or correlated) with Solstad Offsho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offsho has no effect on the direction of Stolt Nielsen i.e., Stolt Nielsen and Solstad Offsho go up and down completely randomly.
Pair Corralation between Stolt Nielsen and Solstad Offsho
Assuming the 90 days trading horizon Stolt Nielsen Limited is expected to generate 1.4 times more return on investment than Solstad Offsho. However, Stolt Nielsen is 1.4 times more volatile than Solstad Offsho. It trades about 0.24 of its potential returns per unit of risk. Solstad Offsho is currently generating about 0.31 per unit of risk. If you would invest 21,509 in Stolt Nielsen Limited on April 17, 2025 and sell it today you would earn a total of 7,691 from holding Stolt Nielsen Limited or generate 35.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stolt Nielsen Limited vs. Solstad Offsho
Performance |
| Timeline |
| Stolt Nielsen Limited |
| Solstad Offsho |
Stolt Nielsen and Solstad Offsho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stolt Nielsen and Solstad Offsho
The main advantage of trading using opposite Stolt Nielsen and Solstad Offsho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen position performs unexpectedly, Solstad Offsho 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 Offsho will offset losses from the drop in Solstad Offsho's long position.| Stolt Nielsen vs. Sparebank 1 SMN | Stolt Nielsen vs. Sparebank 1 Nord Norge | Stolt Nielsen vs. Aker ASA | Stolt Nielsen vs. Storebrand ASA |
| Solstad Offsho vs. Havila Shipping ASA | Solstad Offsho vs. Hafnia | Solstad Offsho vs. Standard Supply AS | Solstad Offsho vs. Viking Supply Ships |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |