Correlation Between Performance Food and Solstad Offshore

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

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

Diversification Opportunities for Performance Food and Solstad Offshore

0.06

Correlation Coefficient

Performance Food  Solstad Offshore

Significant diversification

The 3 months correlation between Performance and Solstad is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA and Performance Food 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 Performance Food Group 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 ASA has no effect on the direction of Performance Food i.e., Performance Food and Solstad Offshore go up and down completely randomly.

Pair Corralation between Performance Food and Solstad Offshore

Given the investment horizon of 90 days Performance Food is expected to generate 4.35 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Performance Food Group is 10.02 times less risky than Solstad Offshore. It trades about 0.13 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  309.00  in Solstad Offshore ASA on May 18, 2025 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	Moves Together
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Performance Food Group  vs.  Solstad Offshore ASA

Performance Food

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Performance Food may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Solstad Offshore ASA

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Solstad Offshore ASA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Solstad Offshore reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Performance Food and Solstad Offshore

The main advantage of trading using opposite Performance Food and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food 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 Performance Food Group and Solstad Offshore ASA 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.