Correlation Between Standard Supply and Solstad Offsho

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

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

Diversification Opportunities for Standard Supply and Solstad Offsho

0.41

Correlation Coefficient

Standard Supply  Solstad Offsho

Very weak diversification

The 3 months correlation between Standard and Solstad is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Standard Supply AS and Solstad Offsho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offsho and Standard Supply 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 Standard Supply AS 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 Standard Supply i.e., Standard Supply and Solstad Offsho go up and down completely randomly.

Pair Corralation between Standard Supply and Solstad Offsho

Assuming the 90 days trading horizon Standard Supply AS is expected to generate 7.77 times more return on investment than Solstad Offsho. However, Standard Supply is 7.77 times more volatile than Solstad Offsho. It trades about 0.1 of its potential returns per unit of risk. Solstad Offsho is currently generating about 0.3 per unit of risk. If you would invest  2,110  in Standard Supply AS on April 24, 2025 and sell it today you would earn a total of  1,180  from holding Standard Supply AS or generate 55.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Standard Supply AS  vs.  Solstad Offsho

Standard Supply AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Standard Supply AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Standard Supply disclosed solid returns over the last few months and may actually be approaching a breakup point.

Solstad Offsho

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Solstad Offsho are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Solstad Offsho disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Standard Supply and Solstad Offsho

The main advantage of trading using opposite Standard Supply and Solstad Offsho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Supply 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.

The idea behind Standard Supply AS and Solstad Offsho 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.