Correlation Between SBM Offshore and Fidelity National
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Fidelity National 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 SBM Offshore and Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM Offshore NV and Fidelity National Information, you can compare the effects of market volatilities on SBM Offshore and Fidelity National 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 SBM Offshore with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Fidelity National.
Diversification Opportunities for SBM Offshore and Fidelity National
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBM and Fidelity is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and SBM 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 SBM Offshore NV are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of SBM Offshore i.e., SBM Offshore and Fidelity National go up and down completely randomly.
Pair Corralation between SBM Offshore and Fidelity National
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 2.14 times more return on investment than Fidelity National. However, SBM Offshore is 2.14 times more volatile than Fidelity National Information. It trades about 0.12 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.14 per unit of risk. If you would invest 1,727 in SBM Offshore NV on November 6, 2024 and sell it today you would earn a total of 61.00 from holding SBM Offshore NV or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
SBM Offshore NV vs. Fidelity National Information
Performance |
| Timeline |
| SBM Offshore NV |
| Fidelity National |
SBM Offshore and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Fidelity National
The main advantage of trading using opposite SBM Offshore and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| SBM Offshore vs. Aptitude Software Group | SBM Offshore vs. Vitec Software Group | SBM Offshore vs. Liechtensteinische Landesbank AG | SBM Offshore vs. BioPharma Credit PLC |
| Fidelity National vs. Albion Technology General | Fidelity National vs. Cairo Communication SpA | Fidelity National vs. Capital Drilling | Fidelity National vs. Aeorema Communications Plc |
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.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |