Correlation Between Solstad Offshore and SL Green

Can any of the company-specific risk be diversified away by investing in both Solstad Offshore and SL Green 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 SL Green 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 SL Green Realty, you can compare the effects of market volatilities on Solstad Offshore and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and SL Green.

Diversification Opportunities for Solstad Offshore and SL Green

-0.04

Correlation Coefficient

Solstad Offshore  SL Green

Good diversification

The 3 months correlation between Solstad and SLG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Solstad Offshore i.e., Solstad Offshore and SL Green go up and down completely randomly.

Pair Corralation between Solstad Offshore and SL Green

Assuming the 90 days horizon Solstad Offshore ASA is expected to generate 7.11 times more return on investment than SL Green. However, Solstad Offshore is 7.11 times more volatile than SL Green Realty. It trades about 0.06 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.03 per unit of risk. If you would invest  309.00  in Solstad Offshore ASA on May 5, 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 Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Solstad Offshore ASA  vs.  SL Green Realty

Solstad Offshore ASA

Risk-Adjusted Performance

Insignificant

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 uncertain technical and fundamental indicators, Solstad Offshore reported solid returns over the last few months and may actually be approaching a breakup point.

SL Green Realty

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, SL Green is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Solstad Offshore and SL Green

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

The idea behind Solstad Offshore ASA and SL Green Realty 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.