Correlation Between Solstad Offshore and TFI International

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

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

Diversification Opportunities for Solstad Offshore and TFI International

0.0

Correlation Coefficient

Solstad Offshore  TFI International

Pay attention - limited upside

The 3 months correlation between Solstad and TFI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International and Solstad Offshore 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 Offshore ASA are associated (or correlated) with TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and TFI International go up and down completely randomly.

Pair Corralation between Solstad Offshore and TFI International

If you would invest  309.00  in Solstad Offshore ASA on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Solstad Offshore ASA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Solstad Offshore ASA  vs.  TFI International

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

TFI International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TFI International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, TFI International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Solstad Offshore and TFI International

The main advantage of trading using opposite Solstad Offshore and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore position performs unexpectedly, TFI International 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 TFI International will offset losses from the drop in TFI International's long position.

The idea behind Solstad Offshore ASA and TFI International 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.