Correlation Between SBM Offshore and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and AcadeMedia 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 AcadeMedia 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 AcadeMedia AB, you can compare the effects of market volatilities on SBM Offshore and AcadeMedia 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 AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and AcadeMedia.
Diversification Opportunities for SBM Offshore and AcadeMedia
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and AcadeMedia is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB 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 AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of SBM Offshore i.e., SBM Offshore and AcadeMedia go up and down completely randomly.
Pair Corralation between SBM Offshore and AcadeMedia
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 2.03 times more return on investment than AcadeMedia. However, SBM Offshore is 2.03 times more volatile than AcadeMedia AB. It trades about 0.06 of its potential returns per unit of risk. AcadeMedia AB is currently generating about -0.23 per unit of risk. If you would invest 1,676 in SBM Offshore NV on August 31, 2024 and sell it today you would earn a total of 37.00 from holding SBM Offshore NV or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. AcadeMedia AB
Performance |
| Timeline |
| SBM Offshore NV |
| AcadeMedia AB |
SBM Offshore and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and AcadeMedia
The main advantage of trading using opposite SBM Offshore and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.| SBM Offshore vs. AcadeMedia AB | SBM Offshore vs. Zinc Media Group | SBM Offshore vs. Auction Technology Group | SBM Offshore vs. Hollywood Bowl Group |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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