Correlation Between CENTURIA OFFICE and SOLSTAD OFFSHORE

Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE 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 CENTURIA OFFICE and SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CENTURIA OFFICE REIT and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on CENTURIA OFFICE 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 CENTURIA OFFICE with a short position of SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and SOLSTAD OFFSHORE.

Diversification Opportunities for CENTURIA OFFICE and SOLSTAD OFFSHORE

0.7

Correlation Coefficient

CENTURIA OFFICE  SOLSTAD OFFSHORE

Poor diversification

The 3 months correlation between CENTURIA and SOLSTAD is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE and CENTURIA OFFICE 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 CENTURIA OFFICE REIT 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 has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and SOLSTAD OFFSHORE go up and down completely randomly.

Pair Corralation between CENTURIA OFFICE and SOLSTAD OFFSHORE

Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the SOLSTAD OFFSHORE. In addition to that, CENTURIA OFFICE is 1.09 times more volatile than SOLSTAD OFFSHORE NK. It trades about -0.1 of its total potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about 0.07 per unit of volatility. If you would invest  344.00  in SOLSTAD OFFSHORE NK on March 22, 2025 and sell it today you would earn a total of  6.00  from holding SOLSTAD OFFSHORE NK or generate 1.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CENTURIA OFFICE REIT  vs.  SOLSTAD OFFSHORE NK

CENTURIA OFFICE REIT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CENTURIA OFFICE REIT are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CENTURIA OFFICE may actually be approaching a critical reversion point that can send shares even higher in July 2025.

SOLSTAD OFFSHORE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SOLSTAD OFFSHORE NK are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SOLSTAD OFFSHORE may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with CENTURIA OFFICE and SOLSTAD OFFSHORE

The main advantage of trading using opposite CENTURIA OFFICE and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE 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 CENTURIA OFFICE REIT and SOLSTAD OFFSHORE NK 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.